MANTHANTIPS:-Gold slides to 1-week low amid growing Fed rate hike bets
Gold prices slumped to a one-week low in European trade on Tuesday, amid growing expectations of a U.S. interest rate hike by the end of this year. Gold for December delivery on the Comex division of the New York Mercantile Exchange fell to a session low of $1,336.70 a troy ounce, the weakest since July 29. It was last at $1,337.15 by 06:59GMT, or 2:59AM ET, down $4.15, or 0.31%. A day earlier, gold shed $3.10, or 0.23%, after the latest U.S. employment report bolstered expectations of faster economic growth and revived speculation that the Federal Reserve will raise interest rates this year. Fed funds futures prices showed traders now see a 44% of a U.S. rate hike by December, according to CME Group’s (NASDAQ:CME) Fed Watch tool. That compares with around 30% as recently as last week. September odds were at around 21%, compared to less than 10% late last week. Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 96.44 early Tuesday, recovering from levels below 95.00 just a week ago, amid resurgent expectations of a U.S. interest rate hike by the end of this year. A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.