Gold Stagnates at US$4,330; US Yields and Hormuz Tensions Weigh on Price

Gold prices held steady around US$4,330 per troy ounce after falling nearly 2% in the previous session. That decline snapped a two-day winning streak, as a sell-off in the bond market drove US yields higher and bolstered the dollar.

Rising yields exert significant pressure on gold, as the precious metal does not generate interest income. The yield on the 30-year US Treasury bond even hit a nearly two-decade high, making interest-bearing assets like bonds more attractive than gold.

Market sentiment was also influenced by the standoff regarding the Strait of Hormuz. US President Donald Trump stated that no talks with Iran are currently underway, while a memorandum of understanding signed by both nations in June has expired with no plans for renewal.

Uncertainty deepened after the United Arab Emirates cut off trade with Iran. This move followed Iran's firing of two ballistic missiles into UAE territory—the first confirmed attack on the Gulf state since May.

Regarding market impact, gold is likely to remain range-bound as long as Treasury yields and the US dollar stay strong. Attention will now shift to the release of the Federal Reserve's July meeting minutes and a speech by Fed Chair Kevin Warsh at Jackson Hole next week. If the Fed minutes strike a hawkish tone, the XAU/USD pair could face renewed downward pressure; however, tensions in the Strait of Hormuz could limit the decline by sustaining safe-haven demand. (asd)*

Source: Newsmaker.id