FX.co ★ Gold Remains Under Pressure on Fed Hike Bets

Gold hovered near $4,280 an ounce on Friday, down more than 1% for the week, as rising US Treasury yields and growing expectations of further Federal Reserve rate hikes pressured the metal.

In energy markets, oil prices stalled after a two-day rally amid reports that US and Iranian negotiators in New York were exploring a potential agreement under which Tehran could reopen the Strait of Hormuz in exchange for Washington easing its economic blockade on Iran.

Inflationary pressures remain elevated, and a string of robust US data releases—highlighted by PMI readings showing business activity expanding at its fastest pace in five years in September—reinforced market expectations of additional Fed tightening. According to the CME FedWatch Tool, traders now assign nearly a 70% probability to a rate hike in October and a 95% chance of another increase in December.

At the same time, gold demand in India improved modestly, as the recent pullback in prices drew in buyers ahead of the festive season.