Gold slipped as the dollar rallied and bond yields gained amid speculation that central banks will keep interest rates elevated for longer to rein in inflation.
(Bloomberg) — Gold slipped as the dollar rallied and bond yields gained amid speculation that central banks will keep interest rates elevated for longer to rein in inflation.
A gauge of greenback strength rose for a fourth day, soaring on Monday to the highest level this year, while a selloff in the bond market saw 10-year Treasury yields hitting the highest level since October 2007. Meanwhile, Federal Reserve Bank of Chicago head Austan Goolsbee said in a CNBC interview that it’s still possible for the US to avoid a recession.
“The latest Fed speak has investors fearing the Fed might need to do more,” said Ed Moya, senior market analyst at Oanda. “Today Goolsbee has Wall Street worried that the Fed will keep rates higher-for-longer and that a November/December rate hike is clearly on the table.”
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Traders are turning their attention to a key US inflation report due this week that’s expected to show a deceleration in consumer-price growth, though market sentiment remains fragile. Later Monday, economic gauges from the Chicago and Dallas Fed will be studied for any indication the economy is losing steam.
Spot gold fell 0.4% to $1,916.83 an ounce as of 10:51 a.m. in New York.
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