Gold Slumps as Hawkish Fed Bets Drive Yields Above 5%

Gold prices plummeted to a one-week low on Thursday as investors bet on a more hawkish Federal Reserve and a strengthening US Dollar.

The 10-year Treasury yield surged to its highest since 2007, reaching above 5%, while the US Dollar Index traded near a two-month high of 101.29.

This surge in yields and dollar strength put pressure on gold, causing it to break below key moving averages and hit $4,266, down 0.48% on the day.

The CME FedWatch Tool now shows a 75% chance of another interest rate hike in October, which is likely to further weigh on gold prices.