Gold prices weakened on Tuesday, slipping below $4,400 an ounce as higher U.S. Treasury yields and stronger crude prices offset some of the metal’s recent momentum. Investors are also positioning ahead of the Federal Reserve’s July meeting minutes, which could offer fresh signals on the direction of U.S. monetary policy.
At 02:26 ET (06:26 GMT), XAU/USD was down 0.5% at $4,395.78 an ounce, while Gold Futures declined 0.5% to $4,451.07. XAG/USD dropped 0.8% to $65.24 an ounce and XPT/USD fell 0.7% to $1,760.90. The US Dollar Index edged 0.1% higher to 99.67.
Treasury Yields Challenge Gold as Oil Fuels Inflation Concerns
The benchmark 10-year U.S. Treasury yield extended its advance, increasing the relative cost of holding gold, which does not provide interest or other regular income.
Energy markets added another complication. Oil prices moved higher after Iran warned it would adopt a “fully offensive” military posture if diplomatic efforts with the United States failed, while Washington ruled out extending the temporary ceasefire.
Continued uncertainty in the Middle East has kept crude markets volatile and raised the possibility that elevated energy costs could feed back into inflation.
Interest-rate swaps no longer fully reflect expectations for another Federal Reserve rate increase before the end of the year. That marks a change from last week, when traders were pricing in another hike by year-end.
Persistently expensive energy could nevertheless strengthen inflation expectations and encourage the Fed to keep monetary policy restrictive for longer. While gold can benefit from its reputation as an inflation hedge, higher interest rates simultaneously make the non-yielding asset less attractive.
September Fed Hike Expectations Decline
Recent U.S. economic figures have moved rate expectations in the opposite direction.
Markets have sharply scaled back the probability of a September increase following unexpected job losses in July, softer-than-anticipated consumer inflation and weaker retail sales.
Current pricing implies roughly a 65% chance that the Federal Reserve will leave interest rates unchanged at its September meeting.
Investors will now turn to Wednesday’s minutes from the Fed’s latest policy meeting for further insight into how officials viewed inflation risks and the appropriate path for borrowing costs.
Gold Faces Important Technical Test Near $4,500
Gold’s rebound above $4,000 an ounce in recent weeks has been supported by renewed investment demand and stronger central-bank purchases, particularly from China.
The metal climbed above its 100-day moving average last week for the first time since April, although prices have subsequently moved back around that level.
The broader technical picture remains constructive while bullion stays above its late-June low near $3,942.
However, gold remains below the $4,440-$4,450 resistance area associated with the downtrend from its late-January record near $5,602. The 200-day moving average around $4,503 represents another significant barrier.
A sustained break above both levels could strengthen the prospect of a recovery towards $5,000. Failure to overcome those resistance zones could instead result in further consolidation.
Central-Bank Buying Provides Longer-Term Support
Beyond short-term interest-rate and technical considerations, ANZ sees continued support from central banks seeking to diversify their reserves.
Central banks globally purchased 244 tonnes of gold during the first quarter of 2026, the strongest quarterly total since the fourth quarter of 2024.
China added another 8 tonnes in April, representing its largest monthly purchase since December 2024.
ANZ expects deteriorating international relations to sustain demand for reserve diversification and forecasts that gold will reach $5,200 an ounce by the end of 2026.
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