Gold fell for a fourth straight session on September 2, touching a three-week low as a stronger dollar and rising Treasury yields reinforced bets on a Federal Reserve rate hike. Fresh U.S.-Iran tensions pushed oil prices higher, adding to the inflation pressure weighing on the metal.
Gold extends its slide as the dollar firms
XAU/USD fell 0.2% to $4,318.56 an ounce on Wednesday. Gold futures declined 0.7% to $4,365.00. Separately, spot gold traded near $4,304.01 an ounce, according to Reuters figures cited by Crypto Briefing. Silver and platinum slipped alongside gold, and the US Dollar Index rose to 99.79.
The metal has now retreated for a fourth straight session, pulling back from last week's high near $4,700. Rising oil prices, higher bond yields, and a firmer US Dollar Index are reinforcing expectations that the Fed may need to keep rates higher for longer.
Iran escalation and hawkish Fed signals drive the move
Fresh U.S. strikes against targets in Iran on Tuesday triggered a retaliation from Tehran, marking a sharp escalation after nearly a month of relative calm. As a result, Brent crude climbed above $95 a barrel and U.S. crude rose above $91, as traders weighed the risk that a prolonged conflict could disrupt energy flows through the Strait of Hormuz.
Higher oil prices matter for gold because energy costs can feed directly into inflation, which can raise the odds of further tightening. Markets are now pricing close to a 70% probability of a Fed rate hike at the September 15 to 16 meeting. The shift follows Fed Chair Kevin Warsh's hawkish Jackson Hole message last week, and Fed Governor Michael Barr said Tuesday that policymakers should be prepared to raise interest rates if inflation does not ease, warning that price pressures could become embedded after remaining above the Fed's target for more than five years.
Bond selloff adds to the pressure
Long-dated Treasury yields have climbed back to levels seen before the Treasury's surprise intervention last month. Thirty-year Treasury yields climbed above 5.28% on Tuesday, returning to the level seen before Treasury Secretary Scott Bessent announced the buyback expansion on August 19. Global government bond yields have also moved higher, reaching their highest levels since 2008.
Even so, gold's pullback follows a nearly 10% gain in August, its strongest monthly performance since January, after the Treasury's increased bond buybacks revived the debasement trade. ANZ said the intervention had initially encouraged investors to add gold exposure; the latest reversal in yields and the dollar has curtailed that momentum, though the bank still expects the broader debasement theme to keep attracting buyers. Technically, gold has also broken below its 200-day moving average, a level widely watched as a measure of longer-term momentum.
Sources: Commodities & Futures News, Crypto Briefing
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