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Gold holds above $4,100 as dollar strength limits downside

Gold is trading near a two-month low, while traders still price an over 85% chance of another Fed rate hike by year end.

Reported · Written up by our desk · Precious Metals

Gold prices were slightly lower into the European session, staying above $4,100 after earlier hitting a two-month low, FXStreet reports. The outlet attributes the pressure largely to a firm US dollar, which reduces demand for the non-yielding metal.

FXStreet also points to shifting expectations around US rates, saying receding bets for an October Federal Reserve rate hike have helped limit further losses in bullion. It notes last week’s US macro data suggested moderating inflation and some cooling in the labor market.

Despite the countervailing rate expectations, traders still price in more than an 85% chance the Fed will raise borrowing costs again by the end of the year, according to FXStreet. The outlet adds that Deutsche Bank economists said a softer headline payrolls print did not change the broader labor market narrative, though the text provided cuts off mid-quote.

Latest closeGold $4,150.40 ▼0.3%

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