Gold rebounds to $3,895 despite inflation worries and hike bets
Gold traded near $3,895/oz after touching $3,870, with markets pricing a 72.9% chance of a December rate hike.
Gold traded around $3,895 per ounce in early Asian hours after touching $3,870, according to a report published by GO Markets citing FXStreet.
Markets priced a 72.9% chance of a US rate increase in December, according to the FedWatch tool, while Fed official Logan said at least two more quarter-point increases are needed.
OCBC said gold's failure to benefit from falling bond yields shows that fresh buying remains limited, and it did not rule out another test of recent lows.
The mix leaves the precious metal between support from inflation concerns and pressure from rate-hike expectations, making its moves vulnerable to sharp swings with each new economic data point.
What do these terms mean?
Quarter-point: An amount equal to 0.25%, the usual change in US interest rates and equal to 25 basis points.
Bond yields: The return a bond issuer pays its holder, which usually rises when rate or inflation expectations increase.
FedWatch: A CME Group tool that gauges market expectations for the probability of a rate change at upcoming meetings.
Recent lows: The lowest price levels an asset recorded in the preceding period, used by traders to gauge the strength of support.
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