Gold Crashes Below $4,350 as Yields Surge
The price of gold (XAU/USD) plummeted to near a two-week low on Wednesday, dropping below $4,350. This decline comes as Treasury yields rose to their highest since January 2025 due to escalating tensions in the Middle East and inflation fears.
American forces struck Iranian targets around the Strait of Hormuz, while Tehran launched retaliatory operations targeting US interests across the region. The resulting global bond selloff put pressure on gold as rising interest rates and higher yields weigh on the non-yielding asset.
Federal Reserve Chair Kevin Warsh's hawkish comments at the Jackson Hole symposium may have contributed to the yellow metal's decline, with traders increasing their bets on a September rate hike. However, according to TD Securities, positioning in gold remains resilient despite the renewed focus on inflation and potential future policy tightening.