Gold Prices Plunge as US Yields Hit Historic Highs

Gold prices fell in European trading on Thursday, continuing their decline for a second consecutive day and heading towards multi-week lows. The precious metal was pressured by rising US Treasury yields and a stronger dollar.

The US Dollar Index rose 0.1% on Thursday, extending gains for a fourth consecutive session and approaching a break above its two-month high of 101.23 points. This reflects continued strength in the US currency against a basket of global currencies.

Rising US Treasury yields also contributed to gold's decline. The yield on the 10-year US Treasury note rose 0.75% on Thursday, hitting a fresh 19-year high of 5.148%. This provides further support for the US dollar and makes dollar-denominated gold less attractive to buyers holding other currencies.

Federal Reserve officials' hawkish comments have strengthened expectations for another US interest rate hike in October, which would mark the second consecutive increase. The probability of a 25-basis-point rate hike increased from 52% to 75%, according to the CME FedWatch Tool.