Gold Prices Slide Amid Rising Treasury Yields, Strong Dollar
Gold and silver prices continued their downward trend on Wednesday, September 2, as rising US Treasury yields, a stronger dollar, and increased Federal Reserve rate hike expectations weighed heavily on non-yielding assets. The precious metals were under pressure in early trade, with gold futures down 0.98% at $4,353.10 an ounce after touching an intraday low of $4,350.10 an ounce.
The weakness in precious metals comes amid a broader risk-off move in global markets. Asian stocks fell sharply in early trade after renewed US strikes on Iran pushed oil prices higher, with Brent crude rising 0.7% to $95.34 a barrel. Higher oil prices have revived concerns about inflation, which could make it harder for the US Federal Reserve to ease monetary policy.
Markets are reassessing the Fed's interest-rate outlook, with traders pricing in a 67% probability of a 25-basis-point rate hike at the Fed's September 16 meeting, up from 39.6% a week earlier. The renewed escalation between the US and Iran has added another layer of uncertainty, while higher oil prices, inflation worries, yields, and the dollar are dominating investor sentiment.