Gold prices slipped on Thursday, tracking toward a weekly loss of more than 2%, as elevated energy costs and rising U.S. Treasury yields fueled speculation that the Federal Reserve may need to raise interest rates further to contain inflation.
At 20:21 ET, spot gold (XAU/USD) fell 0.2% to $4,267.13 an ounce, while gold futures rose 0.1% to $4,302.22. The U.S. Dollar Index was little changed at 101.3.
Other precious metals also declined. Silver spot (XAG/USD) dropped 0.3% to $63.64 an ounce, and platinum spot (XPT/USD) slipped 0.1% to $1,753.37.
U.S. Treasury yields surged on Thursday, with the 30-year yield approaching 5.5%, its highest level in more than two decades. Rising yields typically weigh on non-yielding assets like gold.
Oil prices steadied after surging the previous day, as the United States and Iran remained deadlocked over reopening the Strait of Hormuz, a critical artery for global energy supplies. Negotiators were reportedly exploring a phased agreement under which Tehran would reopen the waterway in exchange for Washington lifting a port blockade.
Elevated energy prices amplified market expectations that the Fed could need to hike rates beyond the increase implemented the prior week, described by the central bank as its first in three years.
ANZ analysts noted that investment demand for gold has remained resilient despite the challenging macro backdrop. "There has been no material liquidation so far," they said.
The tension between rising yields and steady physical investment underscores a market navigating conflicting pressures: higher rates making dollar-denominated assets more attractive, while geopolitical uncertainty continues to support underlying demand for safe-haven metals.
