OPEC+ production cut raises inflation fears, gold drops while oil surges.

Gold prices fell to a nearly one-week low after OPEC+ announced a cut to oil output, raising concerns about inflation and increasing bets of an interest rate hike at the upcoming May meeting of the US Federal Reserve. The opportunity cost of holding non-yielding bullion rises when interest rates are increased to lower inflation. Gold is now vulnerable to a move down to $1,900/oz, given the potential for a higher terminal Fed rate that markets are currently pricing in.