Gold Tumbles to Two-Week Low Amid Rising US Yields and Hawkish Fed Comments
Gold prices have fallen to their lowest level in two weeks due to the strengthening US dollar and rising Treasury yields. The price of gold dropped by 1.3% on Tuesday, reaching $4,389.63, after opening at $4,448.10. This decline marks a third consecutive day of losses for gold.
The increase in US interest rates is a major factor contributing to the decrease in gold prices. Federal Reserve Chair Kevin Warsh's comments at the Jackson Hole symposium have heightened expectations of a September interest rate hike. With the probability of a 25-basis-point rate hike rising from 34% to 60%, investors are becoming increasingly cautious about investing in gold.
The US labor market reports due this week will likely play a crucial role in determining the future direction of gold prices. If the data shows stronger-than-expected job growth, it could reinforce expectations for an interest rate hike and put additional downward pressure on gold.