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Gold Falls to 1-Week Low as Dollar Strengthens and Trade Tensions Rise
Gold prices dropped to their lowest level in a week on Wednesday, pressured by a stronger US dollar and rising Treasury yields, as global markets reacted nervously to renewed tariff threats from former US President Donald Trump.
Trump’s New Tariff Threats Shake Precious Metals
Trump announced plans to impose a 50% tariff on imported copper, alongside long-awaited duties on semiconductors and pharmaceuticals. He also reiterated threats to apply a 10% tariff on BRICS nations, after notifying 14 countries—including Japan and South Korea—of new tariffs set to begin August 1.
Rising Dollar, Yields Weigh Heavily on Gold
The US Dollar Index climbed 0.2%, hitting a two-week high, while 10-year Treasury yields held near their three-week peak—both developments typically bearish for gold.
Edward Meir, analyst at “Marex,” noted that gold’s bullish momentum since mid-February appears broken, adding that rising yields and a strong dollar continue to pressure the metal.
Why Higher Yields Hurt Gold
Gold, which offers no yield, becomes less attractive when bond returns rise. A stronger dollar also makes dollar-denominated gold more expensive for foreign buyers, further reducing demand.
Markets Eye Fed Minutes for Rate Clues
Investors now await the Federal Reserve’s latest meeting minutes, due later today, for any signs of a potential interest rate cut.
According to Ilya Spivak, head of global macro at Tasty Live, "This week is light on data, but the market's reaction to the Fed minutes could shape expectations in the ongoing Fed-vs-market policy debate."
Inflation Expectations Hold Steady
A New York Fed survey showed that US inflation expectations remain stable, with the 1-year outlook at 3.0%, down from 3.2% in May. Three-year and five-year expectations held at 3% and 2.6%, respectively.
Gold Settlement and Spot Prices
At Tuesday’s close, gold futures dropped 0.77%, or $25.90, to settle at $3316.90 per ounce. Spot gold fell 0.4% to $3287, marking its lowest level since June 30, while US futures were last down 0.65% at $3295.
Precious Metals Decline Across the Board
Other precious metals followed suit:
Silver dropped 0.7% to $36.53/oz
Platinum fell 1.2% to $1343.24/oz
Palladium lost 0.8% to $1102.28/oz
