Gold tumbles 4% to seven-week low as oil, dollar and yields climb

Gold prices plummeted 4% on Monday, reaching a seven-week low amid rising oil prices, a stronger dollar, and higher Treasury yields, according to a Reuters report. The Reuters report stated that spot gold tumbled 3.5% to $4,136.81 an ounce, its lowest level since August 5. US gold futures also fell 3.5% to $4,168.40. Analyst Jim Wyckoff attributed the decline to sharply higher crude oil prices and the prospect of tighter monetary policy from the Federal Reserve.

Higher Treasury yields and a near multi-week high US dollar further pressured metal prices, making greenback-denominated bullion more expensive for overseas buyers. Oil prices surged about 3% after President Donald Trump rejected an Iranian peace proposal, contributing to inflationary pressure and encouraging central banks to maintain elevated interest rates.

Although viewed as a hedge against inflation, rising interest rates have reduced gold's appeal relative to yield-bearing assets. Traders priced a 94% chance of an interest-rate increase in December, with the Federal Reserve already raising its benchmark rate and signaling additional hikes. Investors will now closely monitor US job openings data, ADP employment report, Personal Consumption Expenditures readings, and nonfarm payrolls, all set for release this week.

Other precious metals like silver, platinum, and palladium also experienced declines: silver dropped 4.5% to $61.39 an ounce, platinum fell 2.8% to $1,727.88, and palladium decreased 3.6% to $1,220.65.