Gold prices remained near a seven-month low on Wednesday as rising U.S. Treasury yields and growing expectations of further U.S. interest rate increases reduced investor demand for the precious metal.
Spot gold was little changed at US$4,010.11 per ounce by 1109 GMT after falling to US$3,942.99 per ounce on Tuesday, its lowest level since November 2025.
U.S. gold futures for August delivery declined 0.4 percent to US$4,023.80 per ounce.
The precious metal recorded its first quarterly decline since 2024 in the previous session, reflecting shifting market expectations over U.S. monetary policy.
Higher U.S. Treasury yields extended gains for a third consecutive session, while a stronger U.S. dollar further pressured gold by making dollar-priced bullion more expensive for holders of other currencies.
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Analysts said comments from policymakers at the U.S. Federal Reserve had reinforced expectations that interest rates could rise further if inflation remains elevated.
“The weakness is driven in part by comments from the Fed suggesting a rate hike might be needed, with market participants pricing in additional increases this year,” said Giovanni Staunovo, an analyst at UBS.
Federal Reserve Bank of Cleveland President Beth Hammack said on Tuesday she could support higher interest rates if inflationary pressures fail to ease.
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According to the CME FedWatch Tool, traders are pricing in nearly a 67% probability of a Federal Reserve rate increase by September.
Higher interest rates typically reduce the appeal of non-yielding assets such as gold because investors can earn better returns from interest-bearing securities.
Staunovo also noted that investment demand had weakened, with exchange-traded funds (ETFs) recording renewed outflows in recent days.
Investors are now awaiting key U.S. economic data, including the June ADP employment report and Thursday’s closely watched non-farm payrolls figures, for further indications on the Federal Reserve’s policy direction.
Markets are also focused on the annual European Central Bank forum in Sintra, Portugal, where Federal Reserve Chair Kevin Warsh and European Central Bank President Christine Lagarde are scheduled to speak.
Meanwhile, geopolitical uncertainty continued to influence market sentiment after Iran said it would not meet senior U.S. envoys who travelled to the region following the recent outbreak of hostilities, raising fresh questions over prospects for renewed diplomatic engagement.
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Elsewhere in the precious metals market, platinum fell to its lowest level since November, extending recent losses amid broader weakness across the sector.
