Gold trades near $4,400 as rate-hike expectations pressure prices

  • Gold traded near $4,400 an ounce after falling during the previous session.
  • Markets priced a roughly 60% chance of a 25-basis-point Federal Reserve hike next week.
  • The ECB and Bank of Japan were widely expected to raise rates this month.

Gold traded near $4,400 an ounce on Tuesday after declining in the previous session, as expectations of interest-rate increases by major central banks this month weighed on the metal. Markets are pricing in about a 60% probability of a 25-basis-point Federal Reserve rate hike next week after strong jobs data, with upcoming inflation figures set to provide further guidance. The European Central Bank and Bank of Japan are also widely expected to raise rates this month. Higher oil prices, driven in part by renewed US-Iran fighting, are adding to inflation concerns. Gold may still find support from investment and hedging demand, central-bank purchases and the so-called debasement trade.

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