Gold Under Pressure, Dollar Strengthens Amid Surge in Yields and Diplomatic Deadlock
Gold prices weakened sharply in Tuesday's trading as the US dollar strengthened amid a global sell-off in the bond market triggered by inflation concerns. The lack of progress in diplomatic efforts between Washington and Tehran also weighed on market sentiment.
At 4:47 p.m. New York time, spot gold prices fell 1.8% to US$4,483.39 per ounce, while gold futures fell 1.6% to US$4,487.22 per ounce.
Developments in the Middle East are again in the spotlight. Although President Donald Trump postponed a planned attack on Iran after a request from three Gulf leaders, there has been no real breakthrough toward a peace agreement. Trump stated that "serious" negotiations are underway and emphasized that a deal must include a ban on nuclear weapons for Iran. However, he also warned that the US military remains ready to launch a full-scale attack if the talks fail.
Trump revealed that he had previously been close to ordering an attack on Iran and had only given Tehran "two or three days" to return to the negotiating table. Meanwhile, Iranian state media reported that Tehran had submitted a peace proposal that included an end to the conflict on all fronts and demands for compensation for war damages. However, reports said the latest proposal was not significantly different from the previous offer, which Washington had initially rejected.
Additional pressure on gold came from the renewed sell-off in global bond markets. The surge in energy prices due to the conflict in the Gulf region fueled concerns about higher inflation, fueling expectations of interest rate hikes by central banks. The yield on the 10-year US Treasury bond rose to 4.670%, its highest since January 2025, while the yield on the 30-year bond touched 5.181%, a level not seen since 2007.
Rising interest rates and a strengthening dollar typically reduce the appeal of gold, which provides no yield. With the combination of inflationary pressures, surging yields, and geopolitical uncertainty, gold prices are expected to remain volatile in the near term.
Source: Newsmaker.id
