Oil prices surged 5% on Friday, pushing inflation expectations up and prompting traders to re‑price the Fed’s stance. Meanwhile, 10‑year Treasury yields climbed to 4.23%, their highest level in nine months, tightening the risk‑off environment.
Jim Wyckoff, a market analyst at American Gold Exchange, said, "We've got crude oil prices sharply higher. And that suggests still more problematic price inflation, which signals a tighter Fed Reserve monetary policy." He added that the U.S. dollar’s multi‑week rally is amplifying the pressure on metals.
U.S. gold futures on the CME fell 3.9% to $4,153.7 per ounce, mirroring the spot decline. The decline mirrors a 0.6% drop in all‑metal indices, while silver edged 1.2% lower.
Market watchers are eyeing the June FOMC meeting next week, where the Fed will weigh inflation data that could confirm a more hawkish path. If oil prices ease, gold may find support near the $4,200 level, but a further spike in crude could drive the metal deeper into a 3‑month low.