Gold Plunges to Two-Week Low Amid Strong Dollar and Rising Inflation Concerns

Gold prices continued their decline this week, falling to a two-week low as the strong US dollar and rising inflation concerns weighed on the precious metal. Spot gold fell 2.55% to $4,176 per ounce, while US gold futures for December delivery declined by 2.48% to $4,213.90 per ounce.

The decline in gold prices was partly due to the strong dollar, which rose to a high of 101.15, and rising inflation concerns that pushed Brent crude above $107 a barrel. This has increased the opportunity cost of holding non-yielding assets such as gold, making it less attractive for investors.

Ashish Rajodiya, Head, Commodities at PL Capital, noted that elevated crude prices are not boosting gold's safe-haven appeal as they typically would during geopolitical stress, but instead reinforcing the case for further Fed tightening. This has led to a stronger dollar and steeper yield curve, which is working against non-yielding bullion.