Bullion Falls Below $4,200 as Oil, Dollar and Rate Fears Pressure Prices
Gold dropped under $4,200 an ounce as trading opened, with spot metal down 2.1% at $4,198.10 and U.S. futures at $4,231. The decline came as oil topped $106 a barrel, the dollar firmed, and 10-year Treasury yields neared two-decade highs, reinforcing expectations that the Federal Reserve will keep policy tight. Despite near-term selling, gold-backed ETFs drew $18 billion in August, their second-largest monthly inflow on record.
Gold’s slide began as spot metal touched $4,198.10 an ounce, down 2.1%, while U.S. futures stood at $4,231. Oil above $106 and a firmer dollar weighed on the metal. President Donald Trump rejected an Iranian offer to reopen the Strait of Hormuz, though talks were expected to continue.
Long-term Treasury yields approached 5.2%, near two-decade highs. The Fed had lifted rates by a quarter point to 3.75–4.00%, with traders assigning about a 68% chance to another October increase. Silver, platinum and palladium also fell. August gold ETF inflows reached $18 billion, the second-largest monthly total on record.
Falling gold prices may offer some relief to jewelry buyers and industrial users, while investors holding bullion could see short-term losses. Higher oil and Treasury yields could keep borrowing costs elevated, affecting households and businesses. Gold-backed ETF inflows suggest some savers still seek hedges against currency and policy uncertainty. The broader impact may depend on whether rate expectations ease or energy prices remain high.