Gold steadied on Wednesday, but hovered near a seven-month low hit in the previous session as rising US Treasury yields and growing bets that the Federal Reserve will raise interest rates pressured prices.
Spot gold was little changed at US$4,010.11 per ounce as of 1109 GMT, after touching its lowest level since last November of US$3,942.99 in the previous session. US gold futures for August delivery lost 0.4 percent to US$4,023.80/oz.
On Tuesday, the yellow metal recorded its first quarterly loss since 2024.
US Treasury yields rose for a third straight session. A stronger US dollar also added pressure by making bullion less affordable for overseas buyers.
"The weakness is a bit driven by comments from Fed's Hammack, suggesting a rate hike might be needed and market participants pricing in a bit more rate hikes for this year," said UBS analyst Giovanni Staunovo.
Federal Reserve Bank of Cleveland President Beth Hammack said on Tuesday she may advocate for higher rates if inflation pressures don't moderate.
According to the CME FedWatch tool, traders see a nearly 67 percent chance of a rate hike by September.
Expectations for more hikes are not helping investment demand, and ETF holdings have seen renewed outflows in recent days, said Staunovo, noting that price volatility is expected around economic data releases this week.
June ADP employment data, due at 1215 GMT, and Thursday's nonfarm payrolls report could give further clues on the Fed's policy path.
Markets will also closely watch the European Central Bank's annual Sintra conference on Wednesday, where Fed Chair Kevin Warsh and ECB President Christine Lagarde will speak.
On the geopolitical front, concerns persisted over the prospects for US-Iran diplomacy after Tehran said it would not meet senior US envoys who travelled to the region following the recent outbreak of hostilities.
Spot silver fell 0.4 percent to US$58.33 per ounce.
Platinum rose 0.4 percent to US$1,556.95, after hitting its lowest since November. Palladium slid 1.4 percent to US$1,187.50.
Reuters
