Gold, Silver, and Bitcoin Decline as Traders Increase Fed Rate Hike Expectations
Precious metals and bitcoin fell on Wednesday as market expectations shifted toward higher Federal Reserve interest rates, with spot gold down 2.4% and bitcoin losing 1.3%. The decline reflects traders reassessing inflation risks and central bank policy paths, with money markets pricing in a 40% chance of a Fed rate hike by October. Higher real yields and a stronger dollar make non-yielding assets like gold less attractive to investors.
Spot gold fell 2.4% to $4,161.63 per ounce on Wednesday, while U.S. gold futures declined 2.2% and bitcoin dropped 1.3% to $61,049.25, as market sentiment shifted toward expectations of higher Federal Reserve interest rates. Silver-linked ETFs and mining stocks also declined, with the ProShares Ultra Silver ETF down 2.8% and First Majestic Silver shedding 3.8%. According to money market pricing via the CME's FedWatch tool, traders now see a roughly 40% chance of a Fed rate hike by the October meeting, up from prior expectations of a more dovish stance. Commodities strategists attributed the decline to rising real yields and a stronger dollar, which increase the opportunity cost of holding non-yielding assets like gold and silver. The shift in rate expectations was reinforced by hotter-than-expected U.S. jobs data released on Friday, while geopolitical tensions in the Middle East have added to inflation concerns, pushing traders to expect central banks to maintain tighter monetary policies longer than previously anticipated.
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Gold, silver and bitcoin fall as traders up Fed rate hike bets
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