Gold has come under renewed selling pressure following the latest monetary tightening by the US Federal Reserve, as rising Treasury yields and a sharp recovery in the US dollar reduced the appeal of the non-yielding precious metal. On September 16, the Fed raised its benchmark interest rate by 25 basis points to 3.75-4.00 percent, its first rate increase in more than three years.
The impact has been particularly visible in financial markets. The benchmark 10-year US Treasury yield recently moved towards 5.25 percent, its highest level since 2007, while the Dollar Index recovered above the 101 mark. Together, higher yields and a stronger dollar have outweighed some of the support gold would typically receive from heightened geopolitical uncertainty.
