Gold Slumps as Oil Prices Fuel Inflation Fears
Gold prices plummeted over 1% on Friday as surging oil prices fueled inflation anxieties and increased bets that the Federal Reserve will raise interest rates further.
The precious metal has been under pressure from rising Treasury yields, which climbed to multi-decade highs earlier in the week, making non-yielding assets like bullion less attractive to investors.
Spot gold fell 1.5% to $4,223.95 an ounce at 0117 GMT, while US gold futures dropped 1.5% to $4,257.90.
The renewed spike in energy prices was the catalyst for the latest leg lower, with oil futures climbing more than 1% after President Donald Trump rejected an Iranian proposal to end hostilities and reopen the Strait of Hormuz.
Traders have recalibrated their expectations for Fed policy in response, with CME's FedWatch tool now showing a 66% probability of another hike in October.