Gold falls 2.1% on Fed outlook
Global gold prices experienced a decline of 2.1% over the past week, with the ounce price dropping to a low of $4,244 before closing at $4,284. This kept the price below $4,300 for the first time in seven weeks of gains. The drop in gold is attributed to the strengthening dollar and rising government bond yields, driven by market expectations of continued monetary tightening by the U.S. Federal Reserve, which raised interest rates by 25 basis points and emphasized tackling persistent inflation to reach a 2% target. The impact of higher interest rates reduces the attractiveness of gold as a non-yielding asset, especially amid rising U.S. bond yields and the dollar, adding further pressure on gold prices.
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