Gold slips to three-week low as oil climbs; Spot gold dropped 1.6% in world market

Gold slipped ‌to a more than three-week low on Tuesday, following a rise in oil prices after stalled U.S.–Iran talks, as markets weighed inflation risks and interest-rate concerns ahead of a slew of central bank decisions. Spot gold dropped 1.6% to $4,605.18 per ounce, as of 1105 GMT, its lowest level since April 6. U.S. gold futures for June delivery fell 1.6% to $4,619.10. The decline in gold and silver ⁠prices mirrors an increase in oil prices due to the lack of progress in the negotiations between the U.S. and Iran.

Investors are also looking out for other central bank decisions this week, including those from the European Central Bank, the Bank of England and the Bank of Canada.The dollar gained, while the benchmark 10-year U.S. Treasury yields rose to a three-week high, further ‌pressuring greenback-priced metals. Spot silver fell 3.3% to $72.98 per ounce, platinum lost 2.7% ⁠to $1,928.21 and palladium was down 2.3% at $1,442.41.

While the gold market seems ‌more concerned by the risk of tighter monetary policy ⁠due to the impact of the war than the risk of slowing global growth,  elevated crude prices add to inflationary pressures, increasing the likelihood of higher interest rates. While gold is traditionally seen as a hedge against inflation, high interest rates weigh on its appeal as a non-yielding asset.