Gold Prices Plummet Amid Rising Treasury Yields and Oil Costs
Gold prices plummeted to near $4,150 during the early Asian session on Thursday as higher US Treasury yields and oil prices took precedence over softer PCE inflation data.
The 10-year Treasury yield rose by about 4 basis points to 5.298%, while the 30-year Treasury yield increased nearly 5 basis points to 5.642%.
Oil prices also surged due to stalled US-Iran talks, which can fuel inflation by increasing costs across the economy.
Gold is widely viewed as a hedge against inflation, but its value decreases in a high interest rate environment where bonds become more attractive.
Tai Wong, an independent metals trader, said that energy prices rising has put gold under pressure, despite cooler-than-expected US inflation data reducing expectations for an immediate Federal Reserve rate hike.