Fed Rate Hawks Crush Gold Price $150 to New 13-Month Low

The PRICE of GOLD sank on Thursday, losing $150 in London and hitting fresh 13-month lows beneath $4000 per troy ounce as bond yields and interest-rate expectations rose again, led by the US cost of borrowing following a chorus of 'hawkish' speeches on inflation from Federal Reserve policymakers.

Silver also sank, dropping more than $2 per ounce to dip beneath $50, a new 11-month silver low at the end of October, hit when gold prices fell through $4000.

"The likely tightening of policy [has] already led financial markets to price in some tightening," said Fed Governor Christopher Waller in a speech in London on Tuesday.

"While the precise timing doesn't matter, ensuring that the promised hikes are implemented does."

"Inflation pressures are persisting, while labor market conditions appear to be firming," said Fed Vice Chair for Supervision Michelle Bowman the same day in Washington.

"This indicates that there is still work to do."

"Excess inflation is unacceptable," Dallas Fed President Lorie Logan then said at an event in Houston, Texas.

"It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-basis-point rate increases."

Two of 2026's non-voting Fed chiefs are scheduled to give speeches later on Thursday, as will key policymaker John Williams of the New York Fed.

Following Tuesday's strong US consumer price inflation data, new figures today said initial claims for jobless benefits in the world's largest economy rose a little last week from their recent 6-decade lows, while continuing claims fell back towards mid-October's 3.5-year low.

That saw betting on the US Fed's end-2026 interest rate decision put 94% odds on a rise of 0.25 points and 6% odds on a half-point hike, according to the CME derivatives exchange's FedWatch tool.

By end-March, consensus positioning in the futures market now says the Fed will have raised by at least 0.5 points from today, and benchmark 10-year US Treasury yields in the bond market rose back above 5.00% per annum for the first time in 3 weeks.

Gold fell to its lowest since October 2025 as rate-expectations rose, bottoming at $3853 per troy ounce, almost $20 beneath last month's low.

The US Dollar in contrast extended the past week's steep rebound, hitting the highest level against the rich world's other major currencies since April 2025's 'Liberation Day' chaos on its trade-weighted DXY index.

Crude oil also rose, rallying from 2-month lows for the 2nd session running as talks to end the US-Iran war and also the Russian invasion of Ukraine showed little progress while violence continued.

AI chip giant Nvidia meanwhile sank to a 16-month low, down more than 13% at the New York opening, after CEO Jensen Huang resigned amid claims he had an affair with a junior employee as well as cheating on his wife with an alleged Chinese government spy.