Gold Prices Weaken Amid Rising Yields and Oil Spike
Gold prices slipped on Tuesday as US Treasury yields climbed and oil prices rose. This combination of factors weighed on gold, which doesn't pay interest, making higher yields a significant headwind.
The benchmark 10-year Treasury yield extended its climb, reaching levels that make holding bullion less attractive compared to bonds. Oil prices also surged after new tensions in the Middle East emerged, fueling inflation worries and potentially keeping interest rates higher for longer.
Traders are eagerly awaiting the minutes from the Fed's July meeting, which can provide fresh clues on where interest rates are headed next. Derivatives markets tracked by CME FedWatch indicate a nearly 65% chance of the Fed holding rates at its next meeting after softer recent US data.
Technical analyst Wang Tao at Reuters noted that $4,381 is a near-term support level for gold, with a break potentially opening up a move toward $4,320-$4,351. The outcome will depend on whether the minutes read more hawkish than current market expectations or if they signal a pause in rate hikes.