Gold dips below $2,500 amid Fed rate hike expectations

9 Sep 2024 , 10:14 AM

Gold prices stayed steady on Monday, trading slightly below the important $2,500 per ounce level, as the market awaited August inflation data for more insight into the Federal Reserve’s expected interest rate decrease this month.

Spot gold remained practically unchanged at $2,497.53 per ounce. U.S. gold futures ticked up 0.1% to $2,526.40.

Data released on Friday indicated that nonfarm payrolls climbed by 142,000 positions last month, following a downwardly revised 89,000 increase in July. Reuters polled economists, who predicted that payrolls would increase by 160,000 jobs.

Fed policymakers indicated that they are prepared to begin a series of interest rate reduction at the US central bank’s meeting in two weeks.

Their (Fed officials’) words indicated a likely quarter-point rate decrease, with the possibility of greater cuts if the labour situation deteriorates more.

Fed funds futures traders are currently pricing in a 71% chance of a 25 basis point drop at the Fed’s September 17-18 meeting, as well as a 29% chance of a 50 basis point decrease, according to the CME FedWatch Tool.

A low interest rate environment usually makes the non-yielding metal, bullion, more appealing.

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