Gold hits seven-week low amid rising dollar
Gold prices have dropped by over 3%, reaching their lowest level in more than seven weeks. This decline is driven by a rise in the U.S. dollar, increasing yields on U.S. Treasury bonds, and higher oil prices. The increase in yields and the strengthening dollar have raised the cost of holding gold, which does not generate periodic income. Additionally, rising oil prices heighten inflation risks, fueling expectations of a U.S. interest rate hike. The yields on 10-year U.S. Treasury bonds have climbed to approximately 5.20%, the highest since 2007, while the dollar index remains close to its two-month high. The decline in gold coincided with a roughly 3% rise in oil prices after U.S. President Trump rejected a peace agreement offered by Iran, sparking concerns about persistent inflation and further interest rate hikes. This situation puts additional pressure on gold's appeal as a safe haven.
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