Gold News: Treasury Yields Pressure Gold, but Fed Rate Cut Bets Offer Support

Gold Slides as Yields Climb and Traders Await Trump’s Fed Decision

Gold prices slipped on Wednesday as a modest uptick in U.S. Treasury yields trimmed demand for non-yielding assets. With the market on edge over President Donald Trump’s pending Federal Reserve appointments, investors remained cautious, keeping the yellow metal pinned below the key $3,400 level.

At 12:19 GMT, XAUUSD is trading $3361.99, down $18.97 or -0.56%.

The benchmark 10-year Treasury yield edged higher after four consecutive days of declines, reducing gold’s appeal relative to interest-bearing alternatives. Traders are watching closely for developments from Washington, where Trump is expected to announce his nominee for a vacancy on the Fed’s Board of Governors this week. The shortlist for a possible successor to Fed Chair Jerome Powell has reportedly narrowed to four candidates, heightening speculation over the future direction of U.S. monetary policy.

Fed Rate Cut Bets Firm Despite Policy Uncertainty

According to CME’s FedWatch Tool, market pricing reflects an 87% probability of a Fed rate cut in September. Friday’s disappointing jobs report added fuel to dovish expectations and prompted Trump to fire the head of the U.S. Bureau of Labor Statistics, introducing another layer of uncertainty. Gold tends to benefit from a lower-rate regime, which reduces opportunity cost and can weaken the dollar, boosting bullion demand.

Trade Tensions and Tariff Risks Lend Underlying Support

Trade risks remain a key theme. Trump has once again threatened tariffs on Indian goods in retaliation for New Delhi’s continued imports of Russian oil, adding geopolitical stress to the outlook. This provides a potential tailwind for gold, which remains a traditional hedge in politically uncertain environments.

Physical Demand Slows Despite Bullish Fundamentals

On the physical front, Australia’s Perth Mint reported a 33% month-on-month decline in gold product sales in July, while silver sales hit a six-month low. This soft demand contrasts with persistent investor interest driven by dollar weakness, tariff uncertainty, and inflation concerns.

Gold Prices Forecast: Will $3,400 Hold or Break?

Technically, spot gold is hovering around $3,363, down 0.51% on the day. The $3,390.60 level remains a key resistance, while support lies near $3,346.30 (50-day SMA) and $3,310.48.

If bulls regain momentum, a retest of the $3,439.04 and $3,451.53 highs is likely. A daily close above $3,390 would signal renewed upside interest.

Market Outlook: Bullish Bias Intact Above $3,310

Despite the current pullback, the broader outlook remains constructive. As long as gold holds above the 50-day moving average at $3346.30, bullish momentum may resume, targeting $3,400 and higher. Fed policy signals and geopolitical risk will likely dictate short-term direction, but rate cut bets and safe haven demand continue to underpin strength in gold.

More Information in our Economic Calendar.