Gold prices hit a one week low on Thursday as rising oil prices rose, a stronger US dollar and expectations for the Fed to adopt a more hawkish approach to interest rates pressured the precious metal.
Spot gold declined 0.4% at $4,271.16 an ounce on Thursday morning in New York, after touching its lowest since Sept. 16. US gold futures for December delivery lost 0.3% to $4,306.
Gold prices have been heavily influenced since the Fed announced its plans to raise interest rates last week. Higher interest rates tend to negatively impact bullion, as it pays no interest, making yield-bearing assets relatively more attractive.
Oil prices increased about 1% after talks between the US and Iran showed little sign of progress toward ending the war. Higher energy costs can add to inflationary pressures, potentially complicating the outlook for central banks seeking to bring price growth under control.
Pressuring bullion, the dollar climbed to a two-month high while US 10-year Treasury yields hovered at a near two-decade high, further pressuring bullion by increasing the opportunity cost of holding the non-yielding metal.
Spot silver fell 1.8% to $63.29 per ounce; platinum fell 0.2% to $1,746.44, while palladium gained 0.5% to $1,266.40.
(With files from Bloomberg News and Reuters)