XAU/USD falls for a second session as rising crude prices and bond yields pressure the non-yielding metal despite softer USD.
Gold prices extended losses into a second session, dipping to the $4,125-$4,124 range in Asian trading on Tuesday. Renewed inflation fears, fueled by escalating tensions in the Strait of Hormuz and higher crude oil prices, lifted US Treasury bond yields, drawing investors away from the non-yielding asset.
Earlier expectations of one to two Federal Reserve rate hikes in 2026 have been scaled back to zero or one after June’s weaker-than-expected US Nonfarm Payrolls report. This shift has kept the USD under pressure, potentially cushioning gold’s downside.
Geopolitical risks in the Strait of Hormuz persist as Iran seeks to assert control over the critical waterway, further supporting crude oil prices. An oil tanker was reportedly struck by an unidentified projectile, adding to supply concerns.