Gold Slumps as Brent Crude Surges Past $100 a Barrel
The price of gold dropped on Friday, extending its losses from the previous session. The precious metal fell by 2% in the last session and another 0.4% on Friday to reach $4,030.09 per ounce at 0333 GMT. This represents a decline of over $130 from the two-week high hit on Wednesday.
The decline in gold's price comes as Brent crude oil topped $100 a barrel for the first time since May, stoking inflation concerns and increasing the likelihood of higher interest rates ahead of the Federal Reserve's policy meeting next week. GoldSilver Central Managing Director Brian Lan noted that 'in the short term, we expect more volatility... gold has been trading between $3,980 all the way to about $4,170 and has been stuck in this way for weeks.'
Lan also mentioned that whenever gold's price gets close to $4,000 or slightly below, big buyers tend to step in and purchase it. The current situation is a result of inflation concerns and higher interest rates, which make non-yielding assets like gold less appealing.