Gold closes 1% down amid Fed rate hike bets

Gold prices ended in the red today, April 10, pressured by the solid US employment snapshot for March, which suggested the Federal Reserve will raise interest rates one more time in this monetary policy cycle.

Commercial bank lending in the US shed about $105 billion in the two weeks ended March 29 — the most in Federal Reserve data back to 1973, indicating a tightening of credit conditions on the back of the recent interest rate increases.

The CME FedWatch tool showed a 70% probability of an interest rate hike of 25 basis points (bps) to range 5-5.25% at the US central bank’s forthcoming May 2-3 meeting.

Inflation data due this week will be closely watched for clues about future policy, along with minutes from the last Fed meeting, which saw interest rates lifted to range between 4.75% and 5%.

The yellow metal’s futures for June delivery slipped 1.10%, or $22.60, to $2,003.80 an ounce.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.50% to 102.63 points at 08:43 pm Makkah time.