Gold extends fall on rising Treasury yields

Spot gold fell 0.2% to $4,319.98 per ounce, while U.S. gold futures for August delivery dropped 0.4% to $4,344.30. The metal has now fallen to its lowest level in more than two months, reflecting sustained selling pressure in global markets, News.Az reports, citing The Economic Times.

The decline was driven largely by rising yields on benchmark 10-year U.S. Treasury notes, which climbed to a two-week high. Higher yields increase the opportunity cost of holding non-yielding assets such as gold, making the metal less attractive to investors.

Market expectations that interest rates could remain elevated for longer also contributed to the downturn. Analysts noted that stronger-than-expected economic data and a resilient labour market in the United States have reinforced the view that monetary easing may be delayed further.

Goldman Sachs said it expects the U.S. Federal Reserve to keep interest rates unchanged through 2026, with potential rate cuts pushed into 2027. Market pricing also indicated a growing probability of a rate hike by the end of the year, further dampening sentiment toward bullion.

Citi lowered its near-term gold price forecast, citing the impact of higher yields and warning that recent price strength may not be sustained without stronger physical demand.

Elsewhere in precious metals, silver also declined, while platinum edged lower and palladium posted modest gains. Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, also fell slightly, reflecting weaker investor demand.