Gold Falls on Strong Dollar and Bond Yields.. Trump's Tariff Threats Inflame Markets
Gold prices continued to decline during Wednesday's trading, July 9, affected by the rise of the US dollar and the increase in Treasury bond yields, at a time when concerns are growing due to the new tariff threats issued by US President Donald Trump, adding further volatility to global markets.
Gold in spot trading recorded a slight decrease of 0.2% to settle at $3294.46 per ounce, while gold futures in the US market fell by 0.4% to $3303.50 per ounce. This decline coincided with escalating trade tensions after Trump announced his intention to impose a 50% tariff on copper imports, in addition to implementing other tariffs he had previously threatened on semiconductors and pharmaceuticals.
Trump also reiterated his threats to impose a 10% tariff on BRICS countries, a day after notifying 14 countries, including Japan and South Korea, of new tariff increases set to take effect starting August 1.
In a related context, the dollar index maintained strong levels near its highest value in two weeks, while the yield on 10-year US Treasury bonds remained near its highest levels in three weeks, increasing pressure on the yellow metal.
In this regard, Ilya Spivak, Head of Global Macro Economics at DailyFX, commented: "Gold prices have shown remarkable resilience this month despite the rise in bond yields and the strength of the dollar.. Their ability to withstand this pressure indicates underlying strength and a tendency towards upward movement."
It is worth noting that the rise in bond yields makes holding gold, which does not yield interest, less attractive to investors, while the rise of the dollar reduces demand for the precious metal by holders of other currencies.
Awaiting monetary policy signals, investors are turning to the minutes of the latest Federal Reserve meeting, scheduled to be released later today, in search of any hints about the central bank's intention to lower interest rates amid continued uncertainty in its decisions.
As for other precious metals markets, silver fell by 0.5% to $36.58 per ounce, platinum decreased by 0.8% to $1348.78, and palladium eased by 0.4% to $1106.29 per ounce.
