Gold prices drop over 2% globally as oil surges
Gold prices fell more than 2% worldwide on Thursday, pressured by rising oil prices and Middle East tensions, as investors await the US Federal Reserve meeting.
Key Takeaways
AIGlobal gold prices fell by more than 2% on Thursday, amid escalating conflict in the Middle East and rising oil prices, while investors look ahead to next week's US Federal Reserve meeting for signals on interest rate direction.
Global gold price
Spot gold dropped 2.09% to $4,043.24 per ounce, while gold futures slipped 2.3% to $4,055.30 per ounce.
Oil prices climbed to their highest levels in over six weeks, following a new round of US strikes on Iran and Houthi attacks on oil tankers in the Red Sea. Meanwhile, the US dollar fell 0.2%, making dollar-priced gold less expensive for holders of other currencies.
In contrast, yields on two-year US Treasury bonds, which are sensitive to interest rate changes, rose to a 17-month high. The surge in oil prices has raised concerns that renewed energy disruptions could drive inflation higher and increase the likelihood of the Federal Reserve raising interest rates.
Next US Federal Reserve meeting
The Federal Reserve Board is scheduled to meet next week and is widely expected to leave interest rates unchanged, although futures markets still anticipate at least one rate hike before the end of the year, according to Reuters.