Dollar Retreat Boosts Gold Prices as Market Weighs Federal Reserve Rate Hike Path

智通财经2026/10/08 02:41

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1. On Thursday, as the US dollar retreated from its 18-month high, gold prices rebounded from a two-month low. As of 10:25, spot gold rose as much as 0.74% to $4140.08 per ounce. The weaker dollar reduced the purchase cost of gold for buyers using other currencies, thereby supporting gold prices. On Wednesday, gold prices had touched their lowest level since August 5 due to a stronger dollar and rising US Treasury yields. In the Asian session on Thursday, the US dollar index edged down by 0.1%, trading near 102.16. 2. Chris Weston, head of research at Pepperstone, stated that the short-term outlook for gold remains rather bearish and it is still a seller’s market. Gold prices need to break above $4275 for a more optimistic near-term outlook. He pointed out that if the market starts viewing the rise in long-term yields as a reflection of sovereign credit and fiscal risks rather than a signal of strong economic performance, gold might start moving in tandem with bond yields, and currency devaluation trades could heat up again. 3. Minutes from the Federal Reserve's September meeting showed that policymakers were divided on the need for a rate hike. Some participants argued that a rate increase was necessary to offset the effects of energy and other price shocks; more hawkish core members advocated for a hike to guard against newly emerging demand-driven inflation. According to the CME FedWatch tool, traders assign only an 18% probability of a rate hike later this month, but expect the probability of a December hike to be as high as 80%. Rising interest rates usually dampen the appeal of non-yielding gold. 4. IMF President Kristalina Georgieva warned that the global economy is under threat from persistently high energy prices, record levels of public debt, and risks from an artificial intelligence investment boom, and urged governments to adopt protective fiscal and monetary policy measures.

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