XAU/USD drops over 1% as rising US yields and Middle East tensions weigh on non-yielding bullion.
Gold prices fell more than 1.1% to $4,364 on Tuesday, pressured by surging US Treasury yields, which reached their highest levels since 2007. The 10-year yield settled at 4.712%, down 1 basis point from earlier highs but still a headwind for non-interest-bearing assets like gold.
The US Dollar Index remained flat at 99.60, while escalating tensions between the US and Iran kept energy markets volatile. Oil prices rose amid uncertainty over the Strait of Hormuz, supporting expectations of a Federal Reserve rate hike. Meanwhile, weaker US jobs and inflation data led investors to price out rate hikes in 2026.
US Housing Starts plunged 12.4% month-over-month in July, dropping from 1.415 million to 1.239 million, as elevated mortgage rates and home prices dampened demand. Industrial Production also dipped below expectations, adding to concerns about economic growth.