Gold fell to the lowest in almost two weeks as a global bond selloff sent yields higher, with traders betting the Federal Reserve may need to raise interest rates to contain inflationary pressure from elevated oil prices.
Bullion dropped as much as 2.5% to the lowest since Aug. 19 as global bond yields climbed to the highest since 2008 and the dollar edged higher. Both are headwinds for non-yielding gold. The precious metal's three-day decline is on pace for the longest losing streak since early July.
Gold's slide began Friday when Fed Chair Kevin Warsh doubled down on his vow to fight inflation. The drop extended this week as renewed hostilities in the Middle East sent oil prices higher, stoking concerns over persistent price pressures. Traders ramped up their bets on rate hikes, currently pricing an almost 70% chance that the Fed will boost rates by a quarter-point at its meeting this month.
Fed Governor Michael Barr said on Tuesday that the central bank should be prepared to raise rates if inflation fails to subside, warning price pressures are at risk of becoming entrenched after being above target for more than five years.
Gold's weakness "is a follow-through from Warsh's Jackson Hole speech and comments from Barr this morning on inflation," with the renewed selloff in global bonds adding pressure on bullion, said Ryan McKay, senior commodity strategist at TD Securities.
Spot gold fell 2.4% to $4,328.79 an ounce as of 2:43 p.m. in New York. Silver dropped 3.5% to $64.24. Platinum and palladium both fell. The Bloomberg Dollar Spot Index was 0.2% higher.
ALSO READ: Oil's $100 Question: Brent Nears $97 As US-Iran War Escalates
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
