ProShares Ultra Gold (UGL), an exchange-traded fund that seeks twice the daily performance of gold, fell 5.01% during intraday trading on Friday.

The decline aligns with a broader sell-off in gold, which is facing pressure from shifting interest rate expectations. Traders have dramatically scaled back bets on Federal Reserve rate cuts this year and are now pricing in a possibility of rate hikes, as inflation concerns mount due to soaring energy prices from Middle East conflicts. Higher interest rates boost the U.S. dollar and Treasury yields, diminishing the appeal of non-yielding gold.

Additionally, market speculation about potential gold reserve sales by Gulf states to cover fiscal shortfalls, alongside signs of tightening global U.S. dollar liquidity, have contributed to the downturn. Investors may be selling gold to raise dollar cash, exacerbating the decline.