Gold approaches two-week low on rising yields, Fed hike bets
The metal’s weakness 'is a follow-through from Warsh’s Jackson Hole speech and comments from Barr this morning on inflation'
Gold prices plummeted for the third consecutive day on Tuesday, reaching their lowest point in two weeks as global bond yields soared to their highest level since 2008. Traders now estimate a 70% chance of a Federal Reserve rate hike this month, despite the metal's recent gains of 10% in August, the best performance since January.
Comex gold for December delivery slipped by 2.4% to $4,374.10 an ounce, while spot gold declined by 1.7% to $4,362.57. Silver also took a nosedive, losing 3.2% to $64.83 an ounce. The pressure on gold is attributed to a global bond selloff, with ten-year Treasury yields hovering near 4.77% and the British equivalent climbing 16 basis points to 5.22%.
Bullion's weakness is a follow-up to comments from Fed officials, including Governor Michael Barr and Chairman Kevin Warsh, who warned that rising inflation could become entrenched. Despite the recent dip, gold is still up 0.7% for 2026, trading around 20% below its record high of $5,419.83 set in January. Gold-related equities, however, saw a significant decline, with Eldorado Gold, Agnico Eagle, and Equinox Gold all falling between 2.5% and 3.2%.
Indian Prime Minister Narendra Modi urged citizens to refrain from purchasing gold due to the country's widening trade deficit and a weakening currency.
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