Commodities
Gold Plunges as US Yields Surge and Fed Rate Hike Bets Soar
Gold prices have fallen to around $4,295 in Tuesday's early Asian session as rising US Treasury yields and hawkish monetary policy expectations weighed on the precious metal.
The US 10-year Treasury yield surpassed 5% for the first time since 2023 on Monday, creating a headwind for non-yielding gold. The latest US inflation data and elevated energy prices have reinforced markets to significantly increase their bets on tighter monetary policy.
According to the CME FedWatch tool, markets are now pricing in nearly a 92.4% chance that the Federal Reserve will raise interest rates by 25 basis points at its September policy meeting on Wednesday.