Gold Prices Plummet to Two-Week Low Amid Rising Treasury Yields and Strong Dollar

Gold prices plummeted to a two-week low on Tuesday due to rising Treasury yields and a stronger US dollar, which weighed heavily on the market. Spot gold fell 2.4% to $4,342.20 per ounce, while bullion's break below its 200-day moving average triggered additional technical selling.

The US Treasury yields rose to their highest since January 2025 as rising tensions in the Middle East stoked inflation fears and triggered a global bond selloff. This increase in interest rates typically puts pressure on gold, making it less attractive as an investment opportunity compared to other assets that offer returns.

Market analyst Jim Wyckoff noted that 'we're seeing some technical selling pressure... bond yields globally are at highs not seen in years. So that's all working to pressure the gold market.' Wyckoff also stated that 'the path of least resistance right now is probably sideways or sideways to lower in the gold market over the near term. Same goes for silver.'

The US Federal Reserve Chair Kevin Warsh had warned of having more 'work to do' if inflation does not cool down to the central bank's 2% target, which added to bets on a September rate hike. Traders now see a 66% chance of a rate hike this month, according to CME's FedWatch Tool.