Gold hit its lowest level in 5 months on Thursday as higher US bond yields and a strong dollar dealt a severe blow to speculative buyers of the yellow metal.
Minutes from the Fed's July meeting revealed on Wednesday that most policy makers supported higher interest rates to curb inflation.
The prospect of higher US interest rates does not bode well for gold, as it increases the opportunity cost of holding non-yielding assets. This sentiment has weighed heavily on gold since 2022 and is expected to continue until the Fed decides to start cutting rates.
Minutes from the Fed's July meeting revealed on Wednesday that most policy makers supported higher interest rates to curb inflation.
The prospect of higher US interest rates does not bode well for gold, as it increases the opportunity cost of holding non-yielding assets. This sentiment has weighed heavily on gold since 2022 and is expected to continue until the Fed decides to start cutting rates.
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The CME FedWatch tool shows that investors are betting on a 37% chance of another rate hike in 2023 and a 58% chance that the Fed will leave rates unchanged for the rest of 2023.
