Gold Slumps to Four-Week Low Amid Stronger Dollar and Higher Yields
Gold prices fell to a four-week low on Wednesday after extending losses for the fourth consecutive day, weighed down by a stronger US dollar and higher Treasury yields. The price of gold dropped 1.1% to $4,282.65 from an opening level of $4,329.06, with a session high of $4,349.16.
The rise in the US dollar index, which reached a two-week high of 99.81, made dollar-denominated gold less attractive to buyers holding other currencies. The 10-year US Treasury yield also rose more than 0.3% to a three-year high of 4.812%, providing further support for the US dollar.
The global oil price increase added to inflationary pressures facing Federal Reserve policymakers, strengthening expectations for a US interest rate hike in September. According to CME's FedWatch Tool, the probability of a 25-basis-point rate hike stands at 70% for the September meeting.