Gold prices came under renewed selling pressure in Wednesday’s trade, with spot prices falling to a two-month low, pressured by rising Treasury yields, which continued to hover at multi-decade highs, while a strengthening US dollar also weighed on the bullion.
Spot gold fell 2.3% to reach an intraday low of $4,066 per ounce, its lowest level since August 5. The US dollar index climbed 0.5%, making greenback-denominated gold more expensive for holders of other currencies, while 10-year US Treasury yields were at an over two-decade high.
The 10-year Treasury yield last traded around 1 basis point higher at 5.282%. Earlier in the session, it reached 5.35%, its highest level since 2002. The 30-year Treasury bond yield also traded just below a 24-year high, at 5.655%.
Investors are demanding greater compensation to hold global bonds as concerns about persistent inflation, government spending, and surging corporate borrowing to finance the artificial intelligence buildout intensify.
That sense of unease is being compounded by France’s fiscal woes, which are threatening to drag the European Central Bank into the kind of face-off with markets it hasn’t seen since the euro area’s debt crisis more than a decade ago.