Gold prices continued to decline on Wednesday, pressured by rising US Treasury yields. Spot gold fell 1.1% to $3,964.8 per ounce, after hitting a seven-month low in the previous session.
Gold, which fell as low as $3,942.99 on Tuesday, hit its lowest since November. US gold futures for August delivery dropped 1.5% to $3,978.2.
Inflation and rate expectations weigh on prices
Gold posted its steepest quarterly drop since 2013 and suffered its fourth consecutive monthly loss in June. Tensions in the Middle East fueled inflation concerns and strengthened US rate hike expectations, adding pressure on the precious metal.
İlya Spivak, Head of Global Macroeconomics at TİSTİ LAIF, said: "The pressure from rising bond yields is pulling gold down. The US dollar also edged up at the same time, which somewhat confirms the trend."
Markets focus on September
The rise in the dollar index made gold more expensive for holders of other currencies, while the 10-year US Treasury yield continued its upward trend. According to CME Group's FedWatch tool, investors are pricing in a nearly 67% chance of a rate hike in September.
Investors are awaiting the June employment data from ADP today and the nonfarm payrolls figures due on Thursday for further clues on the Federal Reserve's rate path.
Iran-US tensions lift oil
Iran's announcement that it would not meet with US envoys arriving in the region after the renewed flare-up of conflicts weakened the prospect of diplomatic progress and pushed oil prices higher.
Latest on other precious metals
- Silver: down 1.4% in the spot market to $57.75 per ounce
- Platinum: fell 0.6% to $1,542, its lowest since November
- Palladium: traded down 0.4% at $1,199.34
