Gold prices are consolidating below the $4,500 level, with MTS GOLD reporting that the probability of a U.S. Federal Reserve rate hike has risen to 65%. Markets are now focused on U.S. inflation and employment data ahead of the Fed's September 16 meeting. Global gold prices closed down $3.50 at $4,449, following hawkish comments from Fed Chair Kevin Warsh and a surge in oil prices. Gold fell to a low of $4,395 before recovering to trade around $4,450. However, the metal is still up more than 9% for August and has gained approximately 2.86% year-to-date. The SPDR fund holds 1,042.36 tonnes of gold and has seen net outflows of 29.65 tonnes since the start of the year. Analysts view this decline as a correction driven by a reassessment of interest rate expectations, not the end of the uptrend. TD Securities forecasts that gold could pull back to the $4,200 zone by the end of 2026 if the Fed remains hawkish, but maintains a target of $5,350 in Q3 2027. Meanwhile, the CME FedWatch Tool assigns a 65.4% probability of a 25-basis-point rate hike to 3.75%-4.00% at the September meeting.
Toronto Dominion BankFed rate hike probability rises to 65%, pushing policy rate higher.
Hawkish Fed comments and rate hike odds lift yields.
