Gold Prices Struggle Amid Strong Dollar and High Bond Yields
Gold prices continued to struggle on August 1 as the US dollar strengthened and US Treasury bond yields remained high. The spot gold price fell by 1.48% to around $4,041.7 per ounce, while silver dropped by 2.45% to approximately $57.44 per ounce.
The recent session saw gold prices fluctuate between $4,018.2 and $4,112.8 per ounce, maintaining the important psychological zone of $4,000 per ounce but failing to sustain its upward momentum after surpassing $4,101 in the previous session.
July marked the first month of gold price increase since the US-Iran conflict broke out, with a modest gain of around 16 USD. The market mainly moved sideways and accumulated instead of entering a clear upward trend, forming a doji candlestick pattern on the monthly chart that reflects the tug-of-war between buyers and sellers.
The external factors are not favorable for gold as the USD index remained above 101 points, while the yield of 10-year US Treasury bonds stood around 4.7%. High yields increase the opportunity cost of holding gold, a non-interest asset, making it difficult for gold prices to benefit from cooling US inflation data.