Gold Prices Slide Amid High Oil and Treasury Yields
Gold prices slipped lower as oil and US Treasury yields remained high, creating uncertainty for investors about whether the Federal Reserve will raise interest rates again.
According to Reuters, spot gold fell by 0.6% to $4,261.79 an ounce as traders weighed a 69% chance of an October rate hike, as indicated by the CME FedWatch Tool.
The core issue is yields: when Treasuries pay more, holding gold becomes less attractive because it doesn't generate income. Higher US rates can also support the dollar, which weakens demand from buyers using other currencies.
With oil prices on the rise, inflation concerns remain alive, complicating the Fed's 'higher for longer' message and making it difficult to predict a clear trend in gold prices.
Intesa Sanpaolo, an Italian bank, predicts that gold could average around $4,200 over the next couple of quarters with high volatility expected to continue.