Gold Plunges to Two-Week Low Amid Rising Yields and Geopolitical Tensions

Gold prices plummeted to a two-week low of around $4,330 in early Asian trade on Wednesday due to rising US Treasury yields and a stronger dollar. The surge in yields, which reached their highest since January 2025, made holding gold less appealing as it is a non-yielding asset.

The increase in rates was fueled by inflation concerns sparked by Middle East tensions. Bloomberg reported fresh exchanges between the US and Iran, including US strikes near the Strait of Hormuz and Tehran's retaliatory operation.

Federal Reserve Chair Kevin Warsh added to the pressure by stating that policy may need to tighten again if inflation does not move convincingly towards 2%. This hawkish tone prompted markets to increase bets on a September hike.