Gold Holds Decline as Rate Hike Bets Intensify
Gold prices remained under pressure after stronger-than-expected US employment figures increased the likelihood of an interest-rate increase by the Federal Reserve as soon as next week. Bullion was little changed near $4,430 an ounce, following a 1% drop in the previous session. The US dollar strengthened, making gold more expensive for holders of other currencies.[S1]
Traders raised their bets on a September rate hike to roughly 60% probability, up from an even chance earlier on Friday. The metal has traded in a relatively narrow range since recovering from a low near $4,000 an ounce in July, swinging around $4,400 in the week ended September 6 as investors reassessed monetary policy expectations.[S1]
Middle East Tensions Add to Inflation Concerns
Fears of prolonged energy supply disruptions in the Middle East have intensified, adding to US inflation concerns. Iran announced it struck three oil tankers in the Strait of Hormuz and several US-linked vessels in response to American attacks over the September 5-6 weekend. Oil prices rose on Monday.[S1]
Spot gold slipped 0.1% to $4,426.67 an ounce at 7:25 am in Singapore on Monday. Silver also fell 0.1% to $66.17 an ounce, while platinum declined and palladium edged up. The Bloomberg Dollar Spot Index was steady after gaining 0.1% on Friday. US consumer price data due Friday may offer more clues on the Fed's next move.[S1]
