FX.co ★ Gold Holds Losses on Rate Hike Bets

Gold traded below $4,350 an ounce on Wednesday, stabilizing after a nearly 3% slump in the previous session, as investors weighed the outlook for Federal Reserve interest rate increases in the wake of a sharp rise in global bond yields and oil prices. Bond yields climbed worldwide on intensifying inflation pressures and growing expectations of imminent policy tightening, with US Treasury yields reversing the earlier decline that followed Secretary Scott Bessent’s announcement of an expanded buyback program. Fed Chair Kevin Warsh’s renewed pledge to tackle inflation reinforced the hawkish shift in sentiment, with markets now assigning roughly a 70% probability to a Fed rate hike this month. Investors are now focused on the ADP employment report due Wednesday and Friday’s nonfarm payrolls for further signals on the Fed’s policy trajectory. At the same time, oil prices extended their advance as escalating hostilities between the US and Iran added to inflation concerns.