Gold Pulls Back as Oil Surges and Fed Signals Rate Hike
Gold prices retreated on Thursday after hitting a more than two-month high on Wednesday. Spot gold fell 0.9% to $4,479.12 per ounce by 1140 GMT, while US gold futures edged 0.2% lower to $4,535.70.
The pullback comes as the US Treasury Department announced it would double the size of its liquidity-support buyback operations for longer-dated notes and bonds. This move helped ease pressure in the bond market, pushing bond yields and the dollar lower.
Rising oil prices also weighed on gold, which hit three-week highs due to concerns over supply disruptions in the Middle East. The US Federal Reserve's hawkish stance, as indicated by its latest meeting minutes, further contributed to the decline.
ActivTrades senior analyst Ricardo Evangelista noted that the morning's lower prices were a 'short-term correction rather than the beginning of a broader downward trend.' He added that expectations for Federal Reserve policy and developments in the Persian Gulf would be key drivers in the coming weeks.