25.09.202600:20:26UTC+00Gold Heads for Weekly Drop

Gold hovered around $4,270 an ounce on Friday and was set for a weekly loss of more than 2%, weighed down by a stronger US dollar and a sharp rise in Treasury yields amid growing expectations that the Federal Reserve may need to deliver further interest rate increases to tame inflation. On Thursday, yields on the 10-year and 30-year US Treasuries climbed to their highest levels since 2007 and 2004, respectively, while the dollar advanced to near a two-month high. Those moves followed stronger-than-anticipated US economic data and persistently elevated oil prices, which intensified concerns about entrenched inflation and a prolonged period of higher interest rates.

Futures markets now imply roughly a 67% probability of another Fed rate hike in October, after the central bank implemented its first increase in three years last week. At the same time, oil prices pulled back on reports that the US and Iran were considering a phased agreement that could reopen the Strait of Hormuz and lead to the lifting of a US blockade on Iranian ports.