Gold prices surged more than $100 today, as investors increased their bets that the Federal Reserve will not raise interest rates at its meeting this month. Spot gold rose $108.84, or 2.50%, to $4,478.11 per ounce, while COMEX gold futures for December delivery gained $105.60, or 2.39%, to $4,520.20 per ounce. The rally was supported by a weaker dollar and lower U.S. Treasury yields, which reduced the opportunity cost of holding gold. However, today's price movement is part of a broader gold market trend, which has been buoyed by comments from Federal Reserve Governor Christopher Waller, who signaled support for holding rates steady if upcoming inflation data does not come in higher than expected. According to the latest CME Group FedWatch Tool, investors now assign a 51.6% probability that the Fed will hold rates at its September meeting, up from 36.8% yesterday, while the odds of a 0.25% hike have fallen to 48.4% from 63.2%.
Fed rate-hold expectations lower policy rate outlook, reducing yields.
Fed rate-hold expectations lower Treasury yields.
Gold surges on Fed rate-hold bets, weaker dollar, and lower yields.
