Gold fell to a more than one-week low on Friday, pressured by rising U.S. Treasury yields and a firmer dollar, which increase the opportunity cost of non-yielding bullion. The sell-off deepened as Middle East conflict sparked inflation concerns, lifting expectations for higher interest rates. Spot gold slid 2.6% to $4,527.80 per ounce, its lowest since May 5. Other precious metals also tumbled, with silver down 8.7% and on track for its worst day since March 3.
Gold prices are tumbling sharply, falling over 13% since the U.S.-Iran conflict escalated on February 28. Spot gold dropped 2% to around $4,557 per ounce, the lowest in weeks, with losses extending for a fourth straight session. The move is being blamed on rising oil prices fueling renewed inflation fears, higher U.S. Treasury yields, and a stronger dollar. Markets have also grown more skeptical about near-term rate cuts, weighing on the non-yielding metal.
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Investors are bracing for US Treasury yields to stay elevated, driven mainly by oil prices rising amid a prolonged Middle East conflict and persistent inflation above the Fed’s target for nearly five years. Long-dated yields, including the 10-year benchmark, have surged—up about 45 basis points since early March and hitting an 11-month high. Higher borrowing costs could weigh on growth and equities, while Warsh must manage inflationary pressures beyond the Fed’s direct control.
Indian government bonds closed April near end-of-March levels after a drop on Thursday. The slide followed a rise in crude oil prices and a jump in US Treasury yields, which pressured Asian rates. Even as central bank policy stayed relatively dovish and eased some anxiety, the broader signals left downside risks for bond prices.
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