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Gold holds near lows as US yields keep a floor under USD
The article notes futures are pricing an 80.0% chance the Fed will hold rates in October, up from 30.0% a week earlier, despite modest USD support from a weaker dollar index pullback.
Gold prices on XAU/USD edged higher on Monday but stayed range-bound, with attempts to move above $4,200 capped and two-month lows around $4,110 still close, according to FXStreet.
FXStreet links the limited upside to high US Treasury yields, which it says help support US dollar dips, even as the US Dollar Index has pulled back and helped provide some support to precious metals.
The piece also points to cooling expectations for additional Fed tightening after disappointing US labor market data on Friday, while noting that rate pricing shifted so that futures now imply an 80.0% chance of no change in October, compared with 30.0% a week earlier, with December hike hopes largely unchanged.
FXStreet further cites a risk-off market tone tied to a global bond sell-off, and says the US dollar has found support from euro weakness after France’s borrowing costs escalated, though some analysts warn a potential debt crisis could weigh on the USD.
Latest closeGold $4,172.10 ▼0.7%|Dollar index 101.92 ▼0.2%