Gold Prices Plummet as Oil Costs and Hawkish Fed Weigh on Dollar

Gold prices plummeted to a one-week low on Thursday as rising oil costs and expectations of a more hawkish Federal Reserve contributed to a stronger US dollar. The precious metal declined by 0.4% to $4,271.16 an ounce in New York morning trading, with December gold futures losing 0.3% to $4,306.

The Fed's plans to raise interest rates last week have had a significant impact on gold prices. Higher interest rates tend to negatively affect bullion as it earns no interest, making yield-bearing assets relatively more attractive.

Rising oil prices also weighed on gold, increasing energy costs and potentially complicating central banks' efforts to control inflation. Oil prices jumped about 1% after talks between the US and Iran showed little progress toward ending the war.