Oil Surge Triggers Gold Sell-Off Amid Rising Yields

The price of gold took a hit on July 23 as oil prices surged above $100, driven by geopolitical tensions and supply disruptions in critical energy routes. Front-month gold futures fell 2.39% to $4,046.60, while the GLD gold ETF lost 2%.

The sharp rise in oil prices was largely due to concerns over tanker traffic and the risk of delayed cargoes, higher insurance costs, and fewer barrels reaching the market.

Meanwhile, the 10-year Treasury yield climbed to about 4.71%, driven by persistent inflation and tighter monetary policy. This had a more significant impact on gold prices than the oil shock itself, as investors opted for higher bond returns over the metal's lack of income.

The dollar also strengthened against other currencies, making dollar-priced gold more expensive in foreign markets. The WSJ Dollar Index rose 0.28% on July 23.