Fed September Rate Hike Probability at 63%... Gold Prices See Steepest Drop Since June

Following the hawkish remarks at Jackson Hole by Federal Reserve Chair Kevin Warsh, the probability of a September interest rate hike has risen to the mid-60% range, while international gold prices have given up some of their gains for the month, Bloomberg and CNBC reported on the 31st local time.

According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability that the benchmark interest rate will be raised by 0.25 percentage points at the September meeting rose from 57% on the 28th to 63% as of the night of the 30th.

Deutsche Bank maintained its forecast that the Fed will implement a total of 0.5 percentage points in rate hikes across two separate moves in September and December.

As of the 31st, gold prices fell 0.7% to $4,422.75 per ounce, and dropped as much as 1.2% during the session to test the $4,400 level.

On the 28th, prices plummeted by more than 3%, marking the steepest decline since early June.

Even so, gold prices are up about 10% for the month of August, heading for their largest monthly gain since January, driven by the revival of the "debased currency trade" sparked by the U.S. Treasury's announcement to expand buybacks.

Rajeev de Mello of GAMA Asset Management noted that "the hawkish pivot surprised investors," predicting that gold prices could pull back to the $4,200–$4,300 range per ounce in the near term.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.