Gold climbed more than 1% to $4,414.30 per ounce by 1:54 p.m. EDT on Wednesday, with U.S. gold futures for December delivery settling at $4,458.80. This increase occurred despite a rise in US Treasury yields, which saw the 10-year benchmark note climb five basis points to 4.845%. The precious metal is being supported by a subdued U.S. dollar and anticipation of upcoming inflation data, which will heavily influence the Federal Reserve's interest rate decisions.
Investors are closely watching the U.S. Producer Price Index (PPI) due on Thursday and the Consumer Price Index (CPI) on Friday for signals about the Fed's next move. Money markets currently price in a 60% chance of a 25-basis-point rate hike at the September 15-16 meeting. High Ridge Futures director of metals trading, David Meger, noted the dollar's recent pressure as a supportive factor for the gold market. However, the broader trend for gold remains bearish, with resistance seen at $4,425 and the 200-day Simple Moving Average (SMA) at $4,537.
Adding to market dynamics, the U.S. Treasury Department announced a bond buyback initiative, the first under Secretary Scott Bessent's leadership, aiming to purchase up to $6 billion of outstanding securities in the 10- to 20-year tranche. This move is designed to contain pressure on long-dated bonds. Meanwhile, rising oil prices, with Brent crude crossing $100 per barrel for the first time since July 24, are contributing to inflation concerns and bolstering the case for potential rate hikes. West Texas Intermediate (WTI) oil is trading around $93.00 per barrel, near its highest level since June 8.
