Gold prices fell 1.5% to $4,351.80 an ounce on Thursday, as a sell‑off in government bonds pushed yields higher and lifted the dollar, creating two headwinds for the precious metal.
Oil prices stayed above $85 a barrel, with the United States and Iran locked in a deadlock over control of the Strait of Hormuz.
Ewa Manthey, a commodity strategist at ING Bank, said that rising Treasury yields raise the opportunity cost of holding a non‑yielding asset like gold.
Long‑dated bonds are at the center of worries about inflation, the debt‑laden artificial‑intelligence boom, and the risk of supply shocks from geopolitical turmoil. Bondholders are also concerned that governments may fail to curb spending, which could hurt fiscal sustainability.
Ole Hansen, head of commodity strategy at Saxo Bank AS, noted that the usual negative link between gold and Treasury yields may weaken, creating an unusual but potentially supportive backdrop for gold.
Traders are waiting for the minutes from the Federal Reserve’s July policy meeting, scheduled for release on Wednesday, and for comments from Fed Chair Kevin Warsh at the Jackson Hole symposium later this month.
Gold’s recent rise above the $4,000 mark has been helped by renewed investor demand and central‑bank buying, especially from China. A Bank of America survey released on Tuesday showed the highest share of fund managers since March 2023 who believe gold is undervalued.
By 12:17 p.m. in New York, spot gold had slipped 1.2% to $4,365.77, silver fell 2.7% to $63.99 an ounce, and platinum and palladium retreated. The Bloomberg Dollar Spot Index edged higher after a three‑day decline.