Gold steadied after the biggest drop in almost a month as a bond rout and deadlock in the Strait of Hormuz dimmed the outlook for the precious metal.
Bullion was trading around $4,340 an ounce, after shedding almost 2% in the previous session. Rising debt yields and a gain in oil prices due to the stalemate in the Iran war snuffed out a two-day gain for bullion.
The yield on 30-year US Treasuries hit the highest in almost two decades on Tuesday, while 10-year yields remained near the highest levels since early 2025. Higher borrowing costs are typically negative for gold, which doesn't pay interest.
| The fresh headwinds for bullion came after its recovery above the $4,000-an-ounce threshold was supported by renewed investor demand and central-bank buying, notably from China. A fund manager survey by Bank of America Corp. on Tuesday showed the share who said gold was undervalued hit the highest level since March 2023.
Prospects appear dim for a swift reopening of Hormuz, through which a fifth of the world's oil and liquefied natural gas transited before the war. US President Donald Trump insisted Tuesday that there were no talks ongoing with Iran, leaving control of the strait in limbo. The memorandum of understanding the two countries signed in June has expired with no plan to extend it, maintaining pressure on oil prices. Energy-led inflation plies pressure on the Federal Reserve to raise interest rates, a headwind for bullion. While there may not be "renewed selling pressure, the recent surge in flows into precious metals appears to be easing," Ryan McKay, an analyst from TD Securities, wrote in a note. The next clues on the Fed's rate path will come later Wednesday with the release of the minutes from its July policy meeting, followed by Chairman Kevin Warsh's speech to the Fed's annual Jackson Hole symposium next week. Spot gold was 0.2% higher at $4,343.36 an ounce at 8:50 a.m. in Singapore. Silver fell 0.5% to $63.02 an ounce. Platinum and palladium also edged lower. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after rising 0.1% the previous session. ALSO READ: Oil Gains For Fourth Day: Brent Crude Above $91 As US-Iran Stalemate Keeps Hormuz In Focus |
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