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Gold drops more than 2% as US-Iran strikes boost oil and yields
XAU/USD last traded near $4,342 after an earlier peak around $4,461, while the 10-year Treasury yield rose nearly four basis points to 4.792%.
Gold fell more than 2.30% on Tuesday as the US and Iran traded strikes and the Middle East conflict escalated, with investors also reacting to higher oil prices and a rise in US Treasury yields, according to FXStreet.
At the time of writing, XAU/USD was trading around $4,342 after reaching a high near $4,461. The move coincided with a jump in the 10-year Treasury benchmark note, which rose nearly four basis points to 4.792%, driven by strength in oil as West Texas Intermediate pushed to nearly $90.00 a barrel.
The shift in rate expectations also moved financial markets, with Prime Terminal data indicating a 71% chance of an interest rate increase at the September meeting, versus a 29% chance of rates staying unchanged.
FXStreet also noted US economic data was mixed, including an ISM Manufacturing PMI for August of 54.6, down from 55.6 in July. Ahead, the US docket includes the Fed’s Beige Book, jobs data, and the ISM Services PMI, followed by Nonfarm Payrolls.
From a trading perspective, the report said gold’s decline accelerated after it broke below key levels including $4,400, and the 100-day Simple Moving Average near $4,365. It added that a daily close below $4,350 would be required for a bearish continuation, while clearing the 100-day SMA would help gold stabilize.
Latest closeGold $4,376.80 ▼1.2%