Gold hits 7-week low as oil-driven inflation fears boost rate-hike bets - Reuters — SkimNews
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- Gold dropped to a seven-week low as oil-linked inflation fears reignited expectations of further rate hikes, per Reuters
- Silver prices fell sharply in tandem, with higher bond yields weighing across the precious metals complex, per CNBC
- Bond yields at 5.2% and firm Fed rate-hike bets capped any rebound attempt, leaving gold nursing a weekly loss, per Kitco
- Strait of Hormuz tensions kept rate-hike bets elevated by adding an oil-supply risk premium to inflation expectations, per Bloomberg — an angle that undercuts gold's traditional safe-haven role
- Federal Reserve expectations emerged as the dominant macro driver, with traders pricing in less chance of near-term cuts and more conviction in a hawkish hold
Why it matters: With bond yields at 5.2% and the Fed seen holding rates higher, gold is losing its dual appeal as an inflation hedge — because the very inflation fears (oil-driven, Hormuz-amplified) are pulling yields up and making non-yielding bullion less competitive against Treasuries. Holders of gold ETFs and miners absorb the squeeze as the weekly loss extends.
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