Rising long-term bond yields in the US, Europe, and Japan weigh on non-yielding gold despite softer US inflation expectations.
Gold prices stabilized around $4,335 after retreating from an early-June peak of $4,450, pressured by surging Treasury yields. US 30-year bond yields reached their highest level since 2007, while 10-year yields in Japan and Germany hit multi-decade highs, reducing demand for non-yielding assets like gold.
Expectations of a potential Bank of Japan rate hike as soon as September and elevated energy prices due to US-Iran tensions added to inflation concerns. Commercial vessel traffic through the Strait of Hormuz remains subdued, further supporting oil prices and weighing on bullion.
Investors have scaled back Federal Reserve rate-cut bets following softer US inflation data, but the yield surge continues to offset this support for gold.