Gold Plummeted to Four-Week Low as Stronger US Dollar and Rising Treasury Yields Weigh on Market

Gold prices plummeted to a four-week low on Wednesday, extending losses for a fourth consecutive day. The precious metal fell 1.1% to $4,282.65, its lowest level since August 7, as a stronger US dollar and rising Treasury yields weighed on the market.

The US dollar index rose 0.2% to a two-week high of 99.81, reflecting continued strength in the US currency against a basket of global currencies. This has made dollar-denominated gold less attractive to buyers holding other currencies.

Global oil prices climbed to their highest levels in six weeks, adding to inflationary pressures facing Federal Reserve policymakers and strengthening expectations for a US interest rate hike in September.

Federal Reserve Governor Michael Barr said that if inflation does not fall quickly, it will be time for the central bank to raise interest rates. Investors are awaiting further key US labor market data, including private-sector employment figures for August, which could reinforce expectations for a September interest rate hike and drive further gains in the US dollar and Treasury yields.