Gold Tumbles as Yields Rise and Fed Rate-Cut Bets Fade
The price of gold has dropped below $4,350 per ounce due to rising US Treasury yields and a shift in expectations for Federal Reserve monetary policy.
The main driver behind this decline is the surge in US Treasury yields, which increases the opportunity cost of holding non-yielding assets like gold. Simultaneously, hawkish signals from Federal Reserve officials have led investors to scale back bets on imminent interest rate cuts, further diminishing gold's appeal.
Rising yields typically strengthen the dollar, making gold more expensive for international buyers and exerting additional downward pressure on the metal's price. The market is currently pricing in a lower probability of a rate cut in the near term, a significant shift from just a few weeks ago.