Gold gains as rate hike prospects rise
Gold prices rose slightly today, as investors focused on the likelihood of the U.S. Federal Reserve raising interest rates again this year. Spot gold increased by 0.1% to reach $4,292.06 per ounce, while December futures contracts gained 0.15% to $4,325. This comes amid a decline in U.S. Treasury bond prices and rising yields following a report showing stronger-than-expected growth in business activity, which heightens the chances of monetary tightening ahead of the midterm elections. PMI data indicate the highest levels since July 2021, with a sharp rise in input prices. Although gold is commonly used as an inflation hedge, the rise in interest rates diminishes its attractiveness due to its lack of yield.
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