Gold Prices Tumble Amid Rising Yields and Strengthening US Dollar

Gold prices fell on Tuesday as rising US Treasury yields strengthened the US Dollar. The benchmark 10-year US Treasury yield climbed towards 4.75%, while the 30-year yield rose above 5.30%, its highest level since 2007, before both reversed during American trading hours.

The higher yields increase the opportunity cost of holding non-yielding assets such as Gold, according to strategists at Brown Brothers Harriman. They note that the renewed upswing in crude oil prices is pushing bond yields higher and worsening already fragile fiscal dynamics.

However, BBH cautions that the risk of further dovish Fed repricing will keep USD rebounds shallow and short-lived. The US Dollar Index (DXY) trades around 99.60 after rebounding from 99.30 on Monday, its weakest level since June 5.