Gold prices edged lower on Thursday as higher US Treasury yields weighed on the precious metal, while investors assessed the US Federal Reserve’s latest policy stance and growing expectations of a possible interest rate hike in September.
Spot gold fell 0.5% to US$4,045.59 an ounce after climbing as much as 2% in the previous session, while US gold futures for August delivery rose 0.2% to US$4,043.70.
The decline came as benchmark 10-year US Treasury yields climbed, reducing the appeal of non-yielding assets such as gold. Markets are currently pricing in a 67% probability of a Federal Reserve rate hike in September, down from about 81% before the central bank left interest rates unchanged on Wednesday.
ANZ analyst Soni Kumari said higher yields reflected market expectations that inflation concerns could lead to higher interest rates, adding pressure on gold prices.
Investors are also awaiting the release of the US Personal Consumption Expenditure (PCE) data for June, while geopolitical tensions remain elevated after the US carried out fresh strikes in Iran on Wednesday.
Separately, RHB Investment Bank Bhd (RHB Research) maintained its negative outlook on COMEX gold, saying the metal is retesting the key US$4,000 support level after settling at US$4,036.30 on Wednesday.
The research house said the bearish technical setup remains intact, with the 20-day and 50-day simple moving averages continuing to trend lower as resistance. It expects resistance to emerge at US$4,200 and said the downside bias should remain as long as prices stay below that level.
RHB Research maintained its short trading position initiated at US$4,605.70, with a stop-loss at US$4,200. It identified immediate support at US$4,000, followed by US$3,850, while resistance is seen at US$4,200 and US$4,400.
