Gold at one-week low as higher oil, hawkish Fed weigh
GLD•Spot gold fell 0.9% to $4,249.37 an ounce, reaching its lowest since September 16, as higher oil prices and expectations for further Federal Reserve rate hikes weighed on prices. The dollar hit a two-month high, while 10-year Treasury yields were near a two-decade high.
1. Gold prices retreat
Spot gold was down 0.9% at $4,249.37 per ounce in mid-session trading after reaching its lowest level since September 16. December U.S. gold futures fell 0.8% to $4,285.
2. Rates and energy pressure
Oil prices rose more than 1% as diplomatic talks between the United States and Iran showed little sign of progress. High Ridge Futures metals trading director David Meger said higher energy prices could stoke inflation concerns and the prospect of additional Fed rate hikes. The Fed raised rates for the first time in three years the previous week and signalled further increases this year; traders priced a 66% chance of an October hike.
3. Other metals decline
A stronger dollar and elevated Treasury yields also weighed on bullion, increasing gold's cost for overseas buyers and the opportunity cost of holding the non-yielding metal. Silver fell 2% to $63.21 an ounce, platinum dropped 1.1% to $1,730.53, and palladium was steady at $1,260.54.
