Skip to content

Gold Climbs as Weakening US Economy Signals Slower Rate Hikes

  • US GDP shrinks for second straight quarter, falling 0.9%
  • Bullion still set for fourth monthly loss as ETF holdings drop
Video player cover image
Powell: Another Unusually Large Hike Depends on Data
Updated on

Gold climbed after the US economy shrank for a second consecutive quarter, pushing the dollar and Treasury yields lower, and clouding the outlook for further aggressive interest-rate hikes as the Federal Reserve fights inflation. 

Bullion rallied as much as 1.3% to a three-week high after a report showed US gross domestic product fell 0.9% in the second quarter as inflation weighed on consumer spending. Chairman Jerome Powell said while a move similar to this week’s 75 basis-point hike was possible again, the pace of hikes will slow at some point.