Gold falls over 1.5%, weighed down by elevated Treasury yields, higher oil prices

Gold prices fell on Tuesday as a rout in U.S. Treasury bonds and rising oil prices weighed on bullion. Precious metal market participants were also looking ahead to the minutes of the Federal Reserve’s July meeting for more cues on monetary policy outlook. 

At 15:47 ET (19:47 GMT), spot gold shed 1.5% to $4,351.23/oz, while gold futures slipped 1.6% to $4,404.57/oz. The yellow metal had rallied over the last two weeks, helped in part by weak U.S. economic data on the labor market and inflation that reduced Fed rate hike expectations. 

U.S. 30-year yield soars to nearly two-decade high, loses steam

Interest rates remained the big story on Tuesday, especially amid a rout in U.S. Treasury bonds that bled into global fixed-income markets. The longer-end 30-year yield, in particular, hit a session high of 5.335%, its highest level since June 2007. The instrument had pared gains since and turned lower, last down 2.4 basis points to 5.286%.

The bond sell-off has come despite benign U.S. consumer and producer price reports last week. Inflationary jitters from rising oil prices due to the Middle East impasse have countered the soft data, while massive bond offerings from mega-tech firms to fund artificial intelligence infrastructure buildouts have compounded debt worries.

Longer-end Treasury yields have been under more pressure than shorter maturities, as their extended timeline makes them more susceptible to changes in interest rates.

Traders will now be looking to the minutes of the Federal Open Market Committee’s (FOMC) July meeting scheduled for Wednesday for more insight into monetary policy outlook. Three regional Fed presidents had dissented with the FOMC’s move to hold rates steady in July, and watchers of monetary policy will be keen to see if there will be any more hawkish commentary in the minutes.

Trump says no talks with Iran after expiry of interim peace deal

Turning to the Middle East, oil prices on Tuesday extended their weekly gains, with Brent crude futures, the global benchmark, last up 0.2% to $91.01 a barrel, after earlier hitting $92.

The advance came as the U.S. and Iran remain at loggerheads over the Strait of Hormuz, with both sides continuing to independently claim control over the vital waterway. President Donald Trump on Monday told reporters that an ongoing U.S. naval blockade of Iran’s ports gave Washington control over the strait.

"There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran. The Naval Blockade remains in full force and effect. The Hormuz Strait is open and operating. All water mines have been removed or detonated," the U.S. president said on his Truth Social service on Tuesday.

His comment came shortly after an earlier post with an image portraying the strategic chokepoint as a territory of the U.S. Kazem Gharibabadi, a top Iranian official, said on social media that Trump’s "delusion" regarding the strait would "be corrected."

Iran has also denied any negotiations with the U.S., instead demanding that Washington fulfill conditions such as ceasing hostilities across all fronts and unfreezing Iranian assets before the strait can be reopened. Iran has separately been working on a framework for management of the strait with Oman, and Trump on Monday warned of possible military action against Oman if it interfered with U.S. efforts to reach a deal with Tehran.

Monday also marked the expiration of the memorandum of understanding inked between the U.S. and Iran in mid-June that subsequently collapsed in July.

"Yesterday’s expiry of the U.S.-Iran ceasefire raises the possibility of an escalation in hostilities between the two sides. If so, this looks likely to favor the U.S. dollar, which, given the inverse correlation between the greenback and gold since the end of January, would suggest that gold may struggle to make much headway from current levels," David Morrison, senior market analyst at Trade Nation, said.

"Indeed, $4,400 is working like a magnet for the price of gold. Given the ongoing consolidation around this level, the question is if this proves to be ceiling for further gains which raises the likelihood of a retest of $4,000. Or could it be a floor allowing gold to build up enough momentum for another rally?" he added.

Gold’s recovery above the key $4,000/oz level in recent weeks has been largely supported by increased central-bank buying, particularly from China. Analysts at ANZ also see longer-term support from central bank diversification. Global central bank gold purchases reached 244 tonnes in the first quarter of 2026, the highest quarterly total since the fourth quarter of 2024, while China added 8 tonnes in April, its largest monthly purchase since December 2024.