US Dollar Weighs on Gold: $4,143.91 as Markets Await Fed Decision
Gold fell 0.5% to $4,143.91 per ounce as the US dollar rose and bond yields climbed, while traders await the Fed decision amid bets on holding rates steady this month.
Spot gold fell 0.5% to $4,143.91 per ounce at 11:34 AM Eastern Time, while December futures dropped 0.4% to $4,163.30.
Reuters reported that the rise in the US dollar and a 0.6% increase in the 10-year US Treasury bond yield eroded support that had come from falling oil prices.
Traders are awaiting the US Federal Reserve's decision this month, with the CME FedWatch tool showing an 82.8% probability of keeping rates unchanged, and a 90% probability of a rate hike in December.
According to the source, the dollar's strength and rising yields overshadowed support from declining oil prices, leaving the trajectory of interest rates and dollar movement as the primary factors shaping gold's direction in upcoming sessions.
What do these terms mean?
Ounce: A unit of weight for precious metals equal to approximately 31.1 grams; gold is priced globally per ounce.
Futures contracts: An agreement to buy or sell a commodity at a specified price today with delivery at a later date.
Treasury bond yield: The percentage return a government bondholder earns on their investment; higher yields make non-yielding assets like gold less attractive.
CME FedWatch tool: A tool that measures traders' expectations for interest rate decisions based on futures contract prices.
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