Gold Sinks as Oil Prices and Treasury Yields Rise
Gold prices slipped lower on Thursday, weighed down by rising oil prices and US Treasury yields. Spot gold fell 0.6% to $4,261.79 per ounce, its lowest since September 17.
The US central bank raised interest rates for the first time in three years last week, signaling further rate hikes this year. With a 69% chance of a rate hike in October, traders are pricing in tighter monetary policy.
According to Hamad Hussain, a climate and commodities economist at Capital Economics, 'Given that there appears to be little progress being made on bringing a decisive end to the war in Iran, oil prices and US Treasury yields are likely to remain elevated.' This would limit gold's potential for gains and could even result in further falls.
US 10-year Treasury yields hovered at a near two-decade high, increasing the opportunity cost of holding non-yielding bullion. Even silver suffered, falling 1.1% to $63.79 per ounce.