SINGAPORE: Gold prices held steady near their lowest level in over a week on Wednesday, as a stronger US dollar and rising Treasury yields weighed on investor sentiment. Market uncertainty also grew after US President Donald Trump announced new tariff plans.
As of 0234 GMT, spot gold was flat at $3,301.50 per ounce, while US gold futures slipped 0.2 per cent to $3,310.10.
Trump said he would impose a 50 per cent tariff on imported copper, along with long-threatened duties on semiconductors and pharmaceuticals. A day earlier, he had warned 14 countries, including Japan and South Korea, of new tariff hikes due to take effect from August 1. He also reiterated plans to impose 10 per cent tariffs on BRICS nations.
The US dollar index held firm near a two-week high, while yields on 10-year Treasury notes hovered close to a three-week peak, both of which typically reduce gold’s appeal.
“Gold prices are showing impressive resilience this month despite rising yields and a strengthening dollar. This suggests there is still underlying strength and a bullish outlook,” said Ilya Spivak, head of global macro at Tastylive.
Higher yields increase the opportunity cost of holding non-interest-bearing gold, while a weaker dollar usually makes gold cheaper for buyers using other currencies.
Investors are now awaiting the US Federal Reserve’s meeting minutes, expected later in the day, for signals on possible interest rate cuts as the central bank maintains a cautious stance.
“It’s a quiet week for data, but gold’s reaction to the Fed’s June meeting minutes could shed light on how close we are to a shift in policy,” Spivak added.
Meanwhile, US inflation expectations remained steady. The New York Fed’s latest survey showed one-year inflation expectations dropped to 3 per cent from 3.2 per cent in May, while the three- and five-year outlooks stayed unchanged at 3 per cent and 2.6 per cent, respectively.
Among other precious metals, spot silver fell 0.5 per cent to $36.58 per ounce, platinum dropped 0.8 per cent to $1,348.78, and palladium slipped 0.4 per cent to $1,106.29.
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