Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeCommoditiesEconomyGold drops as Fed’s Waller says next move likely to be rate hikeU.S. consumer sentiment fell in May to a record low and long-term inflation expectations worsenedAuthor of the article:Last updated 5 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Bullion has traded within a fairly narrow range since falling sharply in the early days of the Iran war, as investors weigh higher rates against the prospect of a high-inflation, low-growth scenario. Photo by FADEL SENNA/AFP via Getty ImagesGold declined as traders ramped up bets on United States Federal Reserve monetary tightening after Governor Christopher Waller warned the Iran war’s energy shock could fuel inflation.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorBullion slipped as much as 1.1 per cent as bond yields and the dollar climbed. Waller said he supports making clear the central bank’s next interest-rate move is just as likely to be an increase as a cut, as the energy shock from the Iran war pushes up prices. Traders have now fully priced a quarter-point rate hike by December for the first time. Higher rates typically weigh on gold as it pays no interest.Waller said his current position is to be patient in holding rates until the war’s impact is clearer, but warned Friday that he wouldn’t rule out a future hike if inflation doesn’t start to slow soon.Meanwhile, U.S. consumer sentiment fell in May to a record low and long-term inflation expectations worsened notably due to the Middle East conflict. The University of Michigan’s final May sentiment index declined to 44.8 this month from 49.8 in April, according to the survey released Friday. The data also showed consumers expect prices to rise an annualized 3.9 per cent over the next five to 10 years, up from 3.5 per cent in April and the highest in seven months.Bullion has traded within a fairly narrow range since falling sharply in the early days of the Iran war, as investors weigh higher rates against the prospect of a high-inflation, low-growth scenario. Bullion is down about 15 per cent since the conflict began in late February.Spot gold fell 0.8 per cent to US$4,506.87 an ounce as of 10:45 a.m. in New York. Silver declined 1.5 per cent to US$75.56 an ounce. Platinum and palladium fell. The Bloomberg Dollar Spot Index, a gauge of the U.S. currency, rose 0.1 per cent.—With assistance from Wendy Wells and Jack Ryan. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.