Gold Prices Plunge to Four-Month Low Amid Stronger Dollar and Higher Yields
Gold prices have declined for four consecutive sessions, hitting their lowest level since early August. The decline is attributed to a stronger US dollar and higher Treasury yields, which outweighed gold's typical safe-haven appeal.
The recent Middle East escalation has led to rising oil prices and inflation expectations, pushing bond yields higher. Analysts at ANZ Research note that the combination of Middle East tensions, a stronger dollar, and rising yields is weighing down gold prices.
Gold broke below its 200-day moving average last week and sliced through shorter-term support levels, including the $4,329-$4,311 area. If this trend continues, it could expose lower price targets such as $4,216 and $4,203.
The next catalyst for gold prices is the US labor market, with the ADP employment report due Wednesday followed by the August nonfarm-payrolls report on Friday. Economists expect payroll growth to remain subdued, which could counterbalance the Fed's renewed inflation focus.