Gold slides below $2,300 as stubborn inflation dims rate-cut hopes

(Bloomberg) -- Gold fell below $2,300 an ounce after a jump in oil prices to nearly $100 a barrel fueled inflation concerns, diminishing market expectations for near-term interest rate cuts from the Federal Reserve.

"The surge in energy costs is a direct threat to the disinflation narrative that has supported gold," said John Smith, a commodities analyst at financial services firm ABC Corp. "Higher for longer is back on the table, and that's a headwind for non-yielding assets."

The move in bullion was underpinned by a broader market reaction to the inflation data. Brent crude, the international benchmark, settled at $98.50 a barrel, its highest since October 2025. This rise in energy prices has pushed the 10-year Treasury yield to 4.65%, making interest-bearing assets more attractive.

The shift in sentiment has significant implications for precious metals. With the market now pricing in a 65% probability of a Federal Reserve rate cut by the end of the third quarter, down from 85% a month ago, gold's path of least resistance appears to be lower. The next key level for gold is the $2,250 support level, a breach of which could signal a deeper correction.

This article is for informational purposes only and does not constitute investment advice.