Gold Price Plunges as Hawkish Fed Prospects Weigh on XAU/USD

The price of gold continued to decline on Wednesday, weighed down by rising US Treasury yields and oil prices.

US 10-year bond yields hit a nearly three-year high at 4.81%, which has made non-yielding assets like gold less appealing.

Strategists at BNY attribute the increase in long-dated US yields to 'fiscal concerns' and doubts about the Federal Reserve's credibility, citing Fed Chairman Kevin Warsh's hawkish speech at the Jackson Hole Symposium as a contributing factor.

The market now prices an almost two-thirds probability of a rate hike at the FOMC's September 16 meeting, with a 67% chance according to the CME FedWatch tool.