Gold Slides as US Yields Surge, Fails to Reach $4,100

The gold price fell nearly 1.5% on Friday as the US dollar recovered some ground after Japanese authorities intervened in foreign exchange markets. The US Dollar Index (DXY) had dropped to a 30-day low before recovering.

Despite this, the DXY only fell by 0.05% to 99.91, failing to provide a tailwind for gold prices. This was due to rising US Treasury yields, which soared to 4.745%, up almost seven and a half basis points.

Investors are assessing whether the Federal Reserve (Fed) will raise rates to tame inflation. The Fed's preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, came in at 3.3% YoY, down from 3.4%, a relief for the US central bank.

Three FOMC members who voted for rate hikes revealed their reasons during the day. Dallas Fed's Lorie Logan suggested that inflation risks are tilting upward and favored raising interest rates to improve the balance of the outlook.