Gold Drops to 1-Month Low

A 0.7% surge in February wholesale prices has pushed Treasury yields to 4.2% and bolstered the dollar index toward 99.9 ahead of today’s interest rate decision. While safe haven demand remains underpinned by the escalation of the Middle East conflict following the death of Iranian security chief Ali Larijani and fresh strikes on Gulf energy infrastructure, the rising opportunity cost of holding non yielding assets has capped any meaningful recovery. Investors are now focused on the FOMC dot plot and Chair Powell’s press conference to gauge if persistent inflationary heat will further delay anticipated rate cuts for 2026. Despite the 3% retreat this week, gold maintains a year to date gain of about 16% as markets navigate the fallout from disrupted shipping through the Strait of Hormuz.