On October 8, easing expectations for rate hikes did not prevent gold from sliding on Wednesday evening.

CBCX noted that in late US trading on September 30, spot gold stood near $4,156 per ounce, down roughly 0.6% for the day, while the probability of an October hike dropped to about 37%, showing that the market's reaction to the data clearly went beyond the short end of the rate curve.

The 10-year Treasury yield rose to about 5.29%, while the 30-year remained near 5.65%. In CBCX's view, softer short-term policy expectations and rising long-term funding costs can coexist, meaning gold's holding cost does not necessarily decline in tandem.

Focusing only on probability shifts for the next meeting makes it easy to miss another layer of pressure exerted by the long end of the bond market. A milder inflation reading improved short-term expectations, but more resilient growth and employment data kept the economic outlook complicated.

For gold, the first round of reaction after the data release and the later move may differ, because participants are still digesting adjustments across different parts of the rate curve. Putting these changes on the same timeline makes it easier to understand why the rebound failed to continue.

Changes in the shape of the rate curve are therefore also an indispensable backdrop for observing gold. The next employment report will further test this divergence.

CBCX analysis said that only if cooling hiring also pulls long-term yields lower could the cost pressure on gold ease materially; if short-end expectations loosen while the long end still rises, price recovery could prove choppy.

Market observation needs to cover both policy expectations and actual bond yields, avoiding treating the two as the same signal. Risk warning: this article is only for information sharing and does not constitute investment advice. Foreign exchange and precious metals are high-risk products with large fluctuations that may cause principal loss. Please invest rationally and bear risks yourself.