Gold prices under pressure fell again on Wednesday, hitting their lowest level in over a week. This decline came as the U.S. dollar gained strength and Treasury yields climbed higher. The market also reacted to fresh tariff threats from former President Donald Trump.
As of 0624 GMT, spot gold dropped by 0.4%, trading at $3,286.96 per ounce. This was the lowest level since June 30. The stronger U.S. dollar and rising Treasury yields pushed investors away from gold. Both factors reduce the appeal of holding non-yielding assets like gold.
Trump announced plans to impose a 50% tariff on imported copper. In addition, he intends to introduce long-discussed tariffs on semiconductors and pharmaceuticals. Moreover, he repeated his warning of 10% tariffs on BRICS nations. Just one day earlier, he notified 14 countries including Japan and South Korea about tariff hikes starting August 1.
The U.S. dollar index rose by 0.2%, reaching a two-week high late Tuesday. Meanwhile, 10-year Treasury yields hovered close to a three-week peak. These developments added to the pressure on gold prices.
Edward Meir, an analyst at Marex, stated that gold’s recent uptrend has broken. According to him, gold prices under pressure reflect a market reacting to a firmer dollar and rising yields.
Higher yields increase the cost of holding gold, which does not generate interest. At the same time, a stronger dollar makes gold more expensive for international buyers. This double impact caused traders to shift toward other investments.
Investors are now watching for the U.S. Federal Reserve’s meeting minutes. These minutes may offer clues about future interest rate cuts. Although this week lacks major economic data, reactions to the Fed’s policy outlook could shift market sentiment.
Ilya Spivak, head of global macro at Tastylive, explained that market movements will likely depend on how the Fed minutes are received. Meanwhile, inflation expectations in the U.S. remained stable. The latest survey by the New York Fed showed one-year expectations at 3%, slightly lower than in May.
Other precious metals also saw declines. Spot silver dropped 0.5% to $36.59 per ounce. Platinum slid by 0.9% to $1,346.57. Palladium held firm at $1,110.45. In summary, gold prices under pressure highlight a market weighed down by policy shifts and economic signals.
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