Gold prices slumped to a three-week low due to continued Fed uncertainty
Following multiple Federal Reserve officials' warnings against placing bets that the central bank was done raising interest rates, gold prices plunged to a more than three-week low on Thursday, continuing a recent wave of declines.
Spot gold dipped 0.1% to $1,949.38 per ounce, while gold futures slipped 0.2% to $1,954.30 per ounce.a
With the dollar and Treasury yields continuing to rise, the yellow metal was set to turn red for the fourth day in a row. Declining demand for gold as a safe haven caused prices to drop as well because markets discounted the Israel-Hamas conflict's significantly lower risk premium.
This week, a number of Fed representatives issued warnings, cautioning the markets not to gamble on any early rate decreases and predicting that U.S. interest rates will stay higher for an extended period of time. Resilience in the US economy and sticky inflation may potentially lead to more rate hikes this year.
Due in part to their remarks, traders redirected their investments toward rate-exposed assets like Treasuries and the dollar, offsetting recent wagers that the Fed's cycle of rate hikes was ending.