Gold Under Pressure as Dollar Strengthens and Oil Prices Soar
The price of gold has been under pressure due to a combination of factors, including a stronger US dollar and higher US Treasury yields.
The US dollar's strength has raised holding costs for non-US currency buyers, suppressing demand. The yield on the 10-year US Treasury note rose to 5.041%, its highest level since July 2007, while the 30-year yield hit 5.401%, approaching a nearly 19-year high.
The rapid rise in risk-free yields has weakened gold's relative appeal, making investors prefer holding US Treasuries that provide stable returns over zero-yield precious metals.
The market is closely watching the Federal Reserve's policy decision on Wednesday, which could further reshape gold's short-term trajectory. Financial markets are heavily betting on a 25 basis point rate hike to 3.75%-4.00%.