Gold Rises as Dollar and U.S. Treasury Yields Decline

Gold prices increased from a one-week low on Wednesday as U.S. Treasury yields fell and the dollar retreated from its peak levels reached in the previous session. However, expectations of maintaining high interest rates limited the gains in bullion. Spot gold rose 0.1% to $1,927.59 per ounce by 06:03 GMT, after dipping to its lowest level since August 29 earlier in the session. U.S. gold futures erased previous losses, stabilizing at $1,952.90. The U.S. dollar decreased by 0.2% after reaching a nearly six-month high on Tuesday, while 10-year U.S. Treasury yields fell from their highest level in over a week, influenced by market signals regarding interest rate hikes. Federal Reserve member Christopher Waller stated that the latest economic data gives the Fed room to assess whether further interest rate hikes are necessary. IG strategist Yeap John Rong said, "The Fed's guidance on policy decisions on a meeting-by-meeting basis has bolstered bets for further monetary tightening." He added that the surge in oil prices does not provide much reassurance regarding global inflation expectations and increases investors' conviction that a long-term interest rate hike decision is on the horizon. According to CME Group's FedWatch service, markets currently expect a 93% chance that the Fed will refrain from raising interest rates temporarily in September, but nearly 40% of expectations indicate a potential hike in November or December. Silver prices in spot transactions increased by 0.2% to $23.56 per ounce, while platinum fell by 0.3% to $923.79. Palladium rose by 0.4% to $1,217.21.