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Gold
Source: Newsmaker.id
Gold prices remained steady below the US$4,300 per troy ounce level during Wednesday's trading (Sept. 16) as investors awaited the Federal Reserve's interest rate decision. Spot gold was down 0.2% at US$4,282.34 per ounce as of 7:55 a.m. Singapore time.
Gold has managed to stem a two-day slide, even as high oil prices continue to fuel inflation concerns. This situation has bolstered market confidence that the Fed will raise interest rates at today's policy meeting.
Market participants now estimate a roughly 92% probability of a Fed rate hike. Such expectations weigh on gold, as rising borrowing costs typically make non-yielding assets like bullion less attractive.
Additional pressure stems from the 10-year US Treasury yield, which climbed to 5.04% on Tuesday—its highest level since 2007. This yield serves as a key benchmark for global borrowing costs and has been driven upward by bond sell-offs, high capital investment needs, and rising energy prices.
Oil prices also remain in focus following gains over the previous two days. Uncertainty regarding the duration of the shutdown of Saudi Arabia's East-West pipeline keeps the energy market on alert, particularly given the line's role in diverting millions of barrels of oil daily away from the Strait of Hormuz.
Gold has fallen more than 3% so far in September, having traded above US$4,700 per ounce in late August. These movements reflect the market's ongoing recalibration of expectations regarding the Fed's policy trajectory and Treasury yield movements.
Analyst Insight: Gold's movement below US$4,300 indicates that primary pressure stems from a combination of high yields, expectations of a Fed rate hike, and concerns over energy-driven inflation. If the Fed raises interest rates and Kevin Warsh signals a hawkish stance, XAU/USD risks retesting the US$4,250 level. However, if the Fed sounds more cautious regarding further hikes, gold is expected to stage a technical rebound to the US$4,320–US$4,350 range. (asd)