Gold closes lower on rising U.S. treasury yields and fears of a large Fed rate hike

Gold futures closed lower on Monday (Sept. 19) as markets were pressured by rising U.S. Treasury bond yields and concerns about a Federal Reserve (Fed) rate hike.

  • Gold futures were down $5.3, or 0.31%, to close at $1,678.2 an ounce.
  • Silver was down 2.30 cents, or 0.12%, at $19.358 an ounce.
  • The platinum contract was up $17.5, or 1.94%, at $918.5 an ounce.
  • The palladium futures rose $108, or 5.1%, at $2,220.70 an ounce.

The yield on the two-year U.S. Treasury bond, which responds to the Fed’s monetary policy, rose to over 3.9%, its highest level since 2007 and well above yields on 10- and 30-year U.S. Treasury bonds.

Rising U.S. treasury yields will increase the cost of gold, because gold is an asset that does not yield interest.

CME Group’s FedWatch tool indicates that investors were 80% expecting the Fed to raise rates by 0.75% to 3.00-3.25% at its September 20-21 meeting and 20% expecting the Fed to raise rates by 1.00%.

Analysts believe gold futures are likely to fall to $1,600-$1,650 per ounce levels if the Fed hikes rates at an accelerated pace.

The Spot Market is Open

Tuesday, September 20, 2022

Metals
Updated at
USD
Bid/Ask
Ounce
Change

Low/High
Gold
14.40
1,672.50
1,673.50
-4.40
-0.28%
1,670.30
1,681.10
Silver
14.40
19.34
19.44
-0.18
-1.00%
19.33
19.67
Platinum
14.40
923.00
933.00
+3.00
+0.33%
917.00
938.00
Palladium
14.40
2,130.00
2,280.00
-30.00%
-1.39%
2,106.00
2,302.00
Rhodium
05.00
12,950.00
14,950.00
0.00
0.00%
12,950.00
14,950.00

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