Fed September Rate Hike Odds Rise to 63% as Gold Posts Biggest Drop Since June

[Financial News] Following Kevin Warsh's hawkish remarks at Jackson Hole, the odds of a September rate hike rose into the mid-60% range. International gold prices gave back part of this month's gains.
On the 31st local time, CNBC and other outlets reported that, according to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a 0.25 percentage point increase in the benchmark rate 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 raise rates by a total of 0.5 percentage points in two steps, in September and December.
As of the 31st, gold was down 0.7% at $4,422.75 per ounce. At one point during the session, it fell as much as 1.2% to the $4,400 level. Earlier, on the 28th, it had plunged more than 3%, marking its biggest drop since early June.
Even so, gold is still up about 10% for August, on track for its biggest monthly gain since January. The rally has been driven by a revived 'debasement trade' after the Ministry of Finance announced expanded Treasury buybacks.
Rajeev DeMello of GAMA Asset Management said, "The hawkish shift surprised investors," adding, "In the short term, gold could fall to the $4,200 to $4,300 range per ounce."

[email protected] Hong Chaewan Reporter