Gold Market Stabilizes Amid Lower Expectations of US Rate Hike

The price of gold saw significant gains on Monday, October 17, amid reduced expectations of an imminent interest rate hike by the Federal Reserve (Fed) and a weakening of the U.S. dollar. This comes in response to recent weak economic data, including declines in consumer confidence and retail sales. These developments have lowered the probability of a September rate increase for the Fed to less than one-third from over 70% at the beginning of the month. Gold, which does not offer yields, benefits from this economic uncertainty and low interest-rate environment. Additionally, the performance of the dollar also contributed positively to gold prices as a weaker currency often boosts demand for the precious metal, viewed as a safe-haven asset during market volatility. The net long positions of investors in gold continued to rise, reaching record levels since 2025, reflecting confidence in gold as an hedge against global financial turbulence.

Source: Valor Econômico