Gold closes at lowest level in more than 2 years – strong dollar and jumping U.S. treasury yields weigh on market

Gold futures fell to their lowest level in more than two years on Monday (Sept. 26) as dollar strength and rising U.S. bond yields weighed on markets. The U.S. Federal Reserve (Fed) continues to raise interest rates in an effort to curb inflation, which is also putting pressure on the gold market.

  • The gold futures fell $22.2, or 1.34%, at $1,633.4 per ounce.
  • Silver contracts were down 43 cents, or 2.27%, at $18.48 an ounce.
  • The platinum contract was down $8.6, or 1%, at $850.1 per ounce.
  • Palladium fell $21.50, or 1%, at $2,049 an ounce.

The dollar index against the six major currencies in a basket of currencies rose 0.81% to 114.1030.

The yield on 2-year U.S. Treasury bonds, which responds to Fed monetary policy, rose to a 15-year high and surpassed yields on 10- and 30-year Treasury bonds, putting pressure on the U.S. Treasury bond market. An inverted yield curve signals a recession.

The strong dollar has made gold contracts priced in dollars more expensive for investors holding other currencies, while a rise in U.S. treasury bond yields will increase the cost of owning gold. This is because gold is an asset that does not yield interest.

The gold market was also negatively affected by the Fed’s interest rate hike. Investors now expect the Fed to raise interest rates by 0.75% at its November meeting and by 0.50% in December. This would make it four times in a row that the Fed has raised rates by 0.75%.

The Spot Market is Open

Tuesday, September 27, 2022

Metals
Updated at
USD
Bid/Ask
Ounce
Change

Low/High
Gold
10.35
1,630.20
1,631.20
+7.80
+0.48%
1,622.40
1,634.30
Silver
10.35
18.43
18.53
+0.10
+0.57%
18.33
18.62
Platinum
10.35
853.00
863.00
+4.10
+0.47%
849.00
868.00
Palladium
10.25
1,976.00
2,126.20
+4.00
+0.20%
1,972.00
2,138.00
Rhodium
05.00
12,500.00
14,500.00
0.00
0.00%
12,500.00
14,500.00

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