Gold Dips On Stronger Dollar, Rising Yields

(RTTNews) - Gold prices traded below $4,300 an ounce on Thursday after oil prices rose sharply overnight, and U.S. bond yields jumped to their highest levels in nearly two decades on inflation concerns stemming primarily from surging global energy prices amid the prolonged West Asia conflict.

Spot gold fell 0.8 percent to $4,254.37 an ounce amid a strengthening U.S. dollar on rising interest-rate expectations. U.S. gold futures were down 0.7 percent at $4,287.34.

The U.S. dollar index clung to a two-month high as a strong manufacturing reading as well as hawkish Fed commentary prompted traders to reprice their rate-hike bets.

The U.S. 10-year Treasury yield held steady after reaching the highest since 2007 overnight.

Elsewhere, Japanese 10-year government bond yield rose to a 30-year high as a weaker yen and surging U.S. yields added to inflationary pressures.

Federal Reserve Governor Michael Barr said on Wednesday that further policy adjustments are likely to be needed against the backdrop of rising inflationary risks and a strong economy.

Speeches from other Fed officials, including New York Fed President John Williams and Fed President Beth Hammack will be in the spotlight later today.

In economic releases, reports on U.S. initial jobless claims and new home sales are due later in the day, followed by data on durables goods orders for August and consumer confidence index score from the University of Michigan on Friday.

Markets currently price in a 55 percent chance of a Federal Reserve rate hike next month, according to the CME's FedWatch tool.

Meanwhile, Brent crude futures surged above $105 a barrel amid heightened uncertainty surrounding U.S.-Iran negotiations.

After U.S. President Trump threatened to 'annihilate' Iran, Tehran said it is 'ready for dialogue and diplomacy and negotiations without accepting the language of force.'

Delivering a defiant speech at the United Nations on Wednesday, Iranian President Masoud Pezeshkian condemned what he called "signs of a bullying mentality" from the U.S. and said that Iran would never surrender.

Earlier in the day, Iran's security chief Mohsen Rezaei said the Strait of Hormuz would not be reopened while Iran's conditions are not met.

Traders also await the outcome of a crucial U.S.-China summit later today for direction. After an unscheduled meeting with Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent announced the extension of Busan trade truce from November 10 to January 10, easing the immediate risk of a renewed escalation in tariffs between the world's two largest economies.