Gold prices retreat as rising Treasury yields and aggressive Fed rate hike expectations dampen demand, while oil prices surge past $100 amid Middle East supply concerns.
Gold prices fell to a two-week low as rising Treasury yields and heightened Fed rate hike expectations reduced the appeal of non-yielding bullion.
Oil prices surged above $100 per barrel following attacks on a key Saudi oil pipeline, escalating Middle East tensions and supply concerns.
Gold futures dropped to a two-week low of $4,315.30 per ounce on Tuesday as 10-year Treasury yields hit 2007 highs. Markets are pricing in a 92.5% probability of a Federal Reserve rate hike following the conclusion of the two-day policy meeting. Meanwhile, geopolitical instability in the Middle East pushed oil prices above $100 per barrel following attacks on a key Saudi pipeline.
Gold is a non-yielding asset; as Treasury yields rise and the Federal Reserve signals potential rate hikes, the opportunity cost of holding gold increases, leading investors to sell.