Gold steadied near US$4,330 an ounce on Sept 2 after sliding almost 6% over the previous three sessions to a two-week low, as renewed Middle East tensions and a global bond selloff strengthened expectations that the US Federal Reserve (Fed) could raise interest rates to curb inflation.
According to Bloomberg, spot gold was little changed at US$4,329.16 an ounce at 7:26am in Singapore, with higher global bond yields and a firmer US dollar weighing on the non-yielding metal.
Pressure on bullion intensified after Fed Chair Kevin Warsh reiterated his determination to fight inflation, while renewed US-Iran strikes pushed oil prices higher and added to concerns over persistent price pressures.
Traders have since raised the probability of a Fed rate hike at its Sept 15-16 meeting to almost 70%.
Fed Governor Michael Barr also warned that the central bank should be prepared to raise rates if inflation fails to ease, saying price pressures risk becoming entrenched after remaining above target for more than five years.
Global bond yields climbed to their highest levels since 2008, with the yield on 30-year US Treasuries rising above 5.28%, returning to levels seen before Treasury Secretary Scott Bessent expanded the government’s bond buyback programme on Aug 19.
The renewed selloff reflected persistent concerns over high inflation and rising government debt, with similar pressure spreading across long-dated bonds globally.
Meanwhile, silver was steady at US$64.11 an ounce, while platinum and palladium edged lower. The Bloomberg Dollar Spot Index was flat after gaining 0.2% in the previous session.
