Gold rebounds sharply as Fed remarks shift market expectations - Economies.com

AI desk brief

Gold rebounded nearly 1.5% in European trade to $4,161.85/oz after hitting a one-week low of $4,073.53 the prior session, as the dollar weakened 0.65% and the 10-year Treasury yield slipped to 5.089%, its lowest in three weeks. The move came after less hawkish remarks from Fed officials and a sharp repricing in FedWatch, with the odds of no October hike rising to 68% from 46% and the probability of a 25 bp hike falling to 32% from 54%.

Near-term direction now hinges on today’s US PPI, retail sales and jobless claims data, following September CPI of 3.7% y/y and the earlier inflation-driven selloff. SPDR Gold Trust holdings were unchanged at 1,054.20t, so price action is being driven more by rates and FX than by ETF flows at this stage.