Gold Prices Plummet as Oil Surges Past $107
Gold prices retreated in today's trading session as oil prices rallied above $107.00 per barrel, forcing traders to focus on potential rate hikes by the Federal Reserve.
The rise in oil prices led to increased inflationary pressure, prompting hawkish central banks to consider further interest rate increases. The European Central Bank raised its interest rate from 2.4% to 2.65%, matching analyst estimates.
Meanwhile, the U.S. dollar strengthened against a broad basket of currencies as traders reacted to rising Treasury yields and inflationary pressure.
The stronger dollar proved bearish for gold, sending prices lower. Analysts warn that if gold declines below $4300, it may head towards the 50 MA at $4266, potentially opening the way to a test of the next support level at $4160-$4180.