Gold holds near seven-week low as rising Fed hike bets outweigh oil's advance

Gold prices steadied near a seven-week low in trading tied to the September 28 session after the metal had already fallen 4%, according to Investing.com. The move followed rising bets that the Federal Reserve will raise interest rates, which tends to pressure gold because higher rates increase the opportunity cost of holding a non-yielding asset. Oil moved in the opposite direction, extending its gains as a standoff between the United States and Iran overshadowed the potential for increased flows of crude from Saudi Arabia. The divergence highlights how the two commodities are currently responding to different forces: gold to interest-rate expectations, oil to geopolitical supply risk. What remains unresolved is whether the Fed follows through on the rate hike that markets are now pricing in, and how a resolution or escalation of the U.S.-Iran situation would affect the Saudi supply picture that oil traders are currently discounting.