Gold Prices Plummet as US Yields Climb Ahead of Fed Rate Decision

Gold prices have declined below $4,300 as US Treasury yields climb and the Federal Reserve prepares to make its interest rate decision on Wednesday. The precious metal remains under selling pressure amid rising inflation worries fueled by surging crude oil prices.

The benchmark 10-year US Treasury yield rose to its highest level since 2007, reaching 5.041%, before coming off its high and last trading up over 3 basis points at 5.00%. Higher yields increase the opportunity cost of holding non-yielding bullion, weighing on gold prices.

Daniel Pavilonis, senior market strategist at StoneX, said that higher energy prices cause more inflation, which could lead to higher interest rates and negatively impact gold prices.