Global Bullion Markets Slide Amid Oil Tensions and Rate Hike Bets
The global bullion markets have experienced a sharp downturn due to rising crude oil costs and strengthening US Treasury yields. Spot gold fell by approximately four percent on Monday, touching a seven-week low of $4,110.55 per ounce. The decline mirrored a broader rout in the precious metals complex, with spot silver dropping 4.5 percent to $61.39 per ounce.
The tension in the Middle East, specifically the ongoing friction between the United States and Iran, has pushed crude oil prices toward $110 per barrel. This has increased concerns over potential disruptions to global energy supplies and forced central banks to maintain a hawkish monetary policy stance to prevent prices from spiraling out of control.
US Treasury yields surged during Monday's trading session, reflecting market recalibrations regarding the Federal Reserve's policy trajectory. The US central bank recently raised its benchmark interest rate by 25 basis points and signaled that further tightening remains a distinct possibility if inflation data proves sticky. According to the CME FedWatch Tool, futures markets are currently pricing in a 70.3 percent probability of another rate hike in October.