Gold Tumbles Below $4,200 as Oil Strengthens Fed Hawkish Bias
Gold prices plummeted on Monday, falling below $4,200 an ounce as rising oil prices and higher US bond yields strengthened expectations that the Federal Reserve may keep tightening policy.
The move put bullion on course for its steepest daily decline since September 1, with spot gold down 2.1% at $4,198.10 an ounce by 0357 GMT, while US gold futures fell 2.1% to $4,231.
Barbara Lambrecht, commodity analyst at Commerzbank, pointed out that earlier-than-expected Fed tightening was lifting both nominal and real yields, increasing the cost of holding gold.
The key support level for gold is around $4,000, with analysts warning that a sharp drop in US yields or a pivot by the Fed could flip gold back into an inflation hedge and force a fast rebound above $4,300-$4,350.