Gold Crashes to Two-Week Low Amid Rising Yields and Strong Dollar

Gold prices plummeted to a two-week low on Tuesday, September 1, as investors took advantage of rising US Treasury yields and a strengthening dollar. The precious metal fell by over 2% to $4,342.20 an ounce in spot markets, while US gold futures declined 1.9% to settle at $4,396.40.

The sharp drop was attributed to the breach of gold's 200-day moving average, which occurred on August 28 when bullion fell below its current level near $4,528. According to Jim Wyckoff, a market analyst at American Gold Exchange, this technical signal prompted additional selling after gold reached a three-month high during the previous week.

The surge in US Treasury yields, fueled by inflation concerns and global bond sell-offs, also contributed to the decline in gold prices. As yields increase, the opportunity cost of holding gold, which pays no interest, becomes higher. Additionally, a stronger dollar makes bullion more expensive for buyers using other currencies.