Gold Prices Plummet Amid Rising Treasury Yields

Gold futures traded at $4,412.20 on Wednesday, September 2, after reaching a low of $4,355 earlier in the session. The spot price of gold, XAU/USD, was down 5.25% on the week, trading at $4,350.48.

The rise in gold futures can be attributed to a recovery from an overnight session that dragged the contract down to $4,356.40 for a loss of $40.00 or 0.91%. However, this recovery was short-lived as spot XAU/USD told a harsher story, with a decline of $98.71 representing 2.22% against its previous close.

The global bond picture is also contributing to the pressure on gold prices. The 10-year Japanese government bond yield crossed 3%, hitting a 30-year high after the Bank of Japan governor confirmed that the central bank will continue raising rates. This, combined with rising yields and expectations of higher policy rates, has weighed directly on gold.