Yields Surge, Gold Slumps
Gold prices closed sharply lower in Friday's trading (July 31). Spot gold fell to US$4,044.87 per troy ounce after failing to sustain levels above US$4,100. Despite the correction, gold still recorded a gain of approximately 1% for July, marking its first monthly rise in five months.
The primary pressure stemmed from a US dollar recovery following its earlier decline—which had been caused by suspected Japanese intervention to prop up the yen. The dollar index strengthened by about 0.2%, making gold more expensive for buyers using other currencies.
Rising US bond yields exerted further pressure. The 10-year Treasury yield breached the 4.739% level, while the 30-year yield climbed to around 5.27%. Surging yields increased the appeal of bonds compared to gold, which yields no interest.
Markets are reassessing the risk of interest rate hikes after Beth Hammack, Neel Kashkari, and Lorie Logan supported a 25-basis-point tightening. All three argued that current policies are insufficient to curb inflation and that delaying action could force the Federal Reserve to raise rates more aggressively later on.
US consumer sentiment data also showed improvement, rising to 55.2 in July from an initial estimate of 54.4. Consumer resilience reinforces the view that the US economy remains robust enough to withstand high borrowing costs, even as core inflation begins to slow.
Newsmaker Analysis: Gold remains under pressure as long as Treasury yields stay high and prices fail to break back above the US$4,080–US$4,100 range. The US$4,020–US$4,000 zone serves as a critical support level. A drop below US$4,000 could intensify selling pressure, although the US-Iran conflict retains the potential to sustain demand for safe-haven assets. (arl)
Source: Newsmaker.id
