Gold prices fell on Wednesday morning to their lowest level in over a week as a stronger dollar and rising US Treasury yields dampened investor appetite for the precious metal, amid growing scepticism over a Federal Reserve rate cut this month.
Gold futures were 0.5% lower at $3,300.50 an ounce, while spot gold retreated 0.9% to $3.295.53 per ounce.
The US dollar index (DX-Y.NYB) strengthened 0.1%, extending gains after hitting a two-week high on Tuesday. Yields on 10-year US Treasuries remained elevated, hovering near their highest levels in three weeks.
Investor sentiment towards gold has cooled in recent days, as markets recalibrate expectations for US monetary policy in the face of persistent inflationary risks. Donald Trump on Tuesday renewed his threat to impose 10% tariffs on Brics nations, just a day after formally notifying 14 countries including Japan and South Korea of planned tariff increases set to take effect on 1 August.
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Expectations that such tariffs could add to inflationary pressures have pushed US yields higher, reinforcing bets that the Fed may delay any potential rate cut.
“The chart looks rather weak with the uptrend channel in place since mid-February now broken,” Marex analyst Edward Meir told Reuters, adding that a stronger dollar and higher treasury yields were pressurising gold at the moment.
Higher yields tend to reduce the appeal of non-yielding assets such as gold, while a firmer dollar makes gold more expensive for holders of other currencies.
Oil prices held firm during early European trading on Wednesday as markets balanced rising US crude inventories with renewed uncertainty over trade policy under president Donald Trump.
Brent crude climbed 0.4% to $70.45 a barrel, while West Texas Intermediate gained 0.5% to trade at $68.70.
Investors remain focused on potential demand implications stemming from the US president’s renewed tariff rhetoric. Trump has pledged to forge ahead with his trade agenda in the coming days, stating he will not grant further extensions on country-specific levies and signalling new tariffs on copper imports.
Crude prices have struggled this year, weighed down in part by concerns over the knock-on effects of escalating US tariffs and retaliatory measures from major trade partners. While recent tensions between Israel and Iran injected volatility into oil markets, a fragile ceasefire has since shifted attention back to global trade dynamics and the outlook for Opec+ supply policy.
