Gold Gets Double Whammy on Weak Inflation, Rising Fed Rate Bets
- U.S. inflation expectations match lowest in data to 1979
- Fed may raise rates as soon as next month, futures show
Gold jewelry sits on display at a store in Phnom Penh, Cambodia, on Sept. 25.
Photographer: Brent Lewin/BloombergThis article is for subscribers only.
Gold investors have more to worry about than the prospect of higher U.S. interest rates.
The metal, traditionally used as a hedge against rising consumer prices, is getting a one-two punch as weak inflation indicators compound the impact of speculation that the Federal Reserve will soon tighten monetary policy. Higher rates curb gold’s appeal because it doesn’t pay interest or give dividends, unlike competing assets.