Gold bounces as Fed hike is priced in

Gold has moved back above USD 4,300, finding renewed demand below that level as traders conclude that a US rate hike today is largely priced in, while some profit-taking on short bond positions has also supported the rebound. Recent pressure has reflected a combination of rising oil prices, a now fully priced US rate hike, a stronger dollar and, not least, long-end bond yields reaching levels last seen in 2023. The coming days will show whether demand from less interest-rate-sensitive investors seeking protection against fiscal and geopolitical risks is sufficient to prevent a deeper correction. In our view, a move back above USD 4,350 and not least USD 4,425 is needed to ease the current downside pressure.