Gold prices lingered on Wednesday close to their lowest level in over one week, facing pressure from a strengthening U.S. dollar and increasing Treasury yields, as new tariff threats from U.S. President Donald Trump unsettled the markets.
In Dubai, gold rates experienced a decline, with 24-carat gold decreasing by AED5 to AED396, while 22-carat gold fell AED4.75 to AED366.75. Additionally, 21-carat gold dropped AED4.75 to AED351.50, and 18-carat gold was down AED4 to AED301.25.
Spot gold remained stable at $3,301.50 per ounce as of 02:34 GMT (currently trading above $3,295). U.S. gold futures dropped 0.2 percent to $3,310.10 (currently trading above $3,303). Trump stated he would impose a 50 percent tariff on imported copper and implement long-anticipated levies on semiconductors and pharmaceuticals.
Trump reiterated his threat of 10 percent tariffs on BRICS nations on Tuesday, a day after notifying 14 countries, including Japan and South Korea, of tariff increases set to take effect on August 1. The U.S. dollar index stabilized after approaching a two-week high late on Tuesday, while the yield on benchmark 10-year U.S. Treasury notes hovered near a three-week peak.
Investors eye Fed meeting minutes
“Gold prices are holding up impressively well this month against a backdrop of rising yields and a strengthening U.S. dollar … its ability to resist the pressure suggests underlying strength and a bullish bias,” Reuters reported, citing Ilya Spivak, head of global macro at Tastylive. Higher yields increase the opportunity cost of holding non-yielding bullion, while a weaker dollar makes gold more affordable for holders of other currencies.
Investors will closely analyze the U.S. Federal Reserve’s latest meeting minutes, scheduled for release later today, for insights into potential interest rate cuts amid the central bank’s cautious approach. “It’s a light week for economic data, but how prices react to minutes from June’s FOMC meeting may help establish where we are in the Fed vs. markets policy debate,” Spivak noted.
Meanwhile, Americans’ inflation outlook remained stable, with the New York Fed’s latest survey showing one-year inflation estimates at 3 percent, down from 3.2 percent in May, while the three- and five-year expectations remained at 3 percent and 2.6 percent, respectively. Spot silver fell 0.5 percent to $36.58 per ounce, platinum was down 0.8 percent to $1,348.78, and palladium lost 0.4 percent to $1,106.29.
