Gold Falls Below $4,350 as Oil, Dollar, and Yields Converge

Gold prices fell below $4,350 on Tuesday as a confluence of rising oil prices, a stronger U.S. dollar, and surging Treasury yields intensified expectations for a Federal Reserve interest rate hike. The decline reversed a recent approach toward $4,400 and underscored how immediate monetary policy concerns can overshadow gold's traditional role as an inflation hedge. COMEX gold futures traded at $4,344 at 3:20 p.m. EDT on September 15, down 1.4% from Monday's close of $4,407.30. The SPDR Gold Shares ETF also fell. The drop came as three key markets moved against gold simultaneously: the 10-year Treasury yield reached 4.996%, up almost 16 basis points; the U.S. Dollar Index rose 0.5 to 99.619; and U.S. crude futures climbed $3.0 to $105.54 a barrel. The pressure stems from the relationship between gold and interest rates. Gold produces no income, so higher yields raise the opportunity cost of holding it. A stronger dollar also makes the metal more expensive for buyers using other currencies.