Gold futures top $4,200 as October Fed hike bets fade to 13% after Warsh’s remarks. Spot gold hits $4,180, while silver, platinum, and palladium rise.
Gold futures top $4,200 as October Fed hike bets fade
Gold rose on Monday as investors scaled back expectations of another Federal Reserve rate increase this month following remarks by Chair Kevin Warsh, lifting U.S. futures above $4,200 an ounce.
At 04:51 GMT, spot gold gained 0.4% to $4,180.29, while U.S. gold futures advanced 0.5% to $4,200.92. The dollar index edged down 0.04% to 101.80, offering modest additional support.
Other precious metals also strengthened. Silver rose 1.3% to $57.73 an ounce, platinum gained 1.3% to $1,655.53, and palladium increased 1.5% to $1,132.74.
Warsh declined on Friday to prejudge the Fed’s upcoming decisions. Traders nevertheless interpreted his comments as reducing the likelihood of an October increase after stronger inflation data had revived tightening concerns.
Markets were pricing roughly a 13% chance of a hike this month, while still assigning a high probability to an increase in December. That distinction leaves gold supported by expectations of a near-term pause, rather than a clear end to tightening.
Gold pays no interest, so changes in expected borrowing costs can influence its appeal relative to bonds and cash.
The next test is whether inflation and employment data reinforce the case for waiting. Renewed energy-price pressure could complicate that outlook and keep bullion sensitive to shifts in yields and the dollar.
Market Insight:
Reduced October hike bets could support gold, but December tightening remains a risk. Watch Treasury yields, the dollar and inflation expectations for confirmation.