Spot gold fell 1.4% to $4,614.71, marking its lowest level since early April as bullion’s appeal softened significantly.
The decline mirrors a sharp climb in crude oil, which adds persistent inflationary pressure to the global economic landscape.
Market analysts note that high energy prices often increase the likelihood of central banks maintaining elevated interest rates.
While gold traditionally serves as a hedge against inflation, high borrowing costs reduce the allure of non-yielding assets.
The Bank of Japan kept rates steady today, though several board members advocated for immediate policy tightening measures.
Investors now pivot toward the Federal Reserve, which begins a two-day meeting to decide on U.S. interest rates.
Expectations for a steady hold remain high, yet officials continue to monitor volatile pricing data across the commodity sector.
The dollar’s recent strength and rising Treasury yields further dampened demand for precious metals during the morning session.
