Gold Prices Plummet as Dollar Strengthens and Interest Rates Rise

Global gold prices continued to decline on Friday as investors grew increasingly bearish on the metal. The precious metal was on track for a weekly loss of more than 2% due to a stronger US dollar and expectations of further Federal Reserve rate hikes.

The dollar's strength made gold and other dollar-priced commodities more expensive for buyers using other currencies, adding pressure on investor demand. US Treasury yields also moved higher, making yield-bearing assets relatively more attractive to investors.

Higher interest rates can weigh on gold because the metal does not generate interest income. This has added to the pressure on gold prices as the latest rise in Treasury yields takes hold.