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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On Thursday, as the US dollar retreated from an 18-month high, gold prices rebounded from a two-month low. As of 10:25, spot gold once rose 0.74% to $4,140.08 per ounce. The weaker dollar reduced gold purchase costs for buyers using other currencies, providing support for gold prices. On Wednesday, influenced by the stronger dollar and rising US Treasury yields, gold prices had touched their lowest since August 5. During Asian trading on Thursday, the US dollar index edged down, currently falling 0.1% to trade near 102.16.
Chris Weston, Head of Research at Pepperstone, stated that the short-term outlook for gold remains challenging and it is still a seller's market. Gold prices need to break through $4,275 before a more optimistic view on the recent upward trend can be expected. He mentioned that if the market starts to interpret the rise in long-term yields as a reflection of sovereign credit and fiscal risks, rather than a sign of economic strength, gold may start to move in tandem with bond yields, and currency depreciation trades may regain popularity.
Minutes from the US Federal Reserve's September meeting show that policymakers were divided on the reasons for raising rates at that time. Some participants believed it was necessary to raise rates to counter the impact of energy and other price shocks. More hawkish core members advocated hikes to prevent emerging demand-driven inflation. CME Group's FedWatch tool indicates that traders see only an 18% chance of a rate hike later this month, but the probability for a rate hike in December is as high as 80%. Rising interest rates typically diminish the attractiveness of non-yielding gold.
Kristalina Georgieva, Managing Director of the International Monetary Fund, warned that the global economy is being threatened by sustained high energy prices, record levels of public debt, and risks stemming from the artificial intelligence investment boom. She urged governments to adopt protective fiscal and monetary policy measures.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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智通财经•2026/10/08 03:21

Citi raises TSMC target price to 4,000 New Taiwan dollars, maintains Buy rating

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智通财经•2026/10/08 03:16