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Gold falls to a one-week low as hawkish Fed outlook lifts yields
XAU/USD was down nearly 0.9% on the day, while the 10-year US Treasury yield rose to about 5.16%, its highest level since 2007.
Gold prices slid to a one-week low on Thursday as a stronger US Dollar and rising Treasury yields reflected a more hawkish Federal Reserve outlook, according to FXStreet.
At the time of writing, XAU/USD traded around $4,250, down nearly 0.85% on the day, after the 10-year US Treasury yield extended its climb to around 5.16%. The rate-sensitive two-year yield also moved near 4.91%.
FXStreet linked the shift in market pricing to stronger US economic signals, including a composite S&P Global Purchasing Managers’ Index that rose to a five-year high of 58.4 in September, plus labor-market data that showed initial jobless claims rising to 197K for the week ending September 19, below expectations.
With the stronger outlook, the CME FedWatch Tool placed the probability of an October rate increase at about 75%. FXStreet also noted that Fed officials have stressed the need to return inflation to the 2% target, while higher oil prices tied to the Middle East conflict keep inflation risks elevated.
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