Gold drops as Treasury yields and oil rise
Gold prices declined on Tuesday due to rising U.S. Treasury bond yields and oil prices, as investors awaited the Federal Reserve's July meeting minutes, which will indicate the direction of monetary policy. Spot gold fell by 0.5% to approximately $4,391 an ounce, while futures contracts dropped by 0.6% to $4,446, amid a rise in 10-year U.S. Treasury yields, increasing the opportunity cost of holding non-yielding gold. Oil prices also increased following Iran's announcement of shifting to a "full-scale offensive" military posture due to stalled negotiations over a permanent agreement, adding to the factors pressuring gold. Markets expect the Federal Reserve to keep interest rates unchanged with about a 65% probability, after economic data weakened the prospects for rate hikes, amid fears of inflation driven by rising energy prices. Similarly, silver, platinum, and palladium prices declined, pending the release of the meeting minutes scheduled for tomorrow.
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