Gold Prices Continued to Fall: The Main Reasons
1 July 19:16
Gold prices fell for the third consecutive day on Wednesday, July 1, as rising U.S. Treasury yields and growing expectations that the Fed may raise interest rates in 2026 are putting pressure on the precious metal. This was reported by "Komersant Ukrainian", citing Reuters.
The spot price of gold fell 0.51% to $3,986.85 per troy ounce, having touched a low of $3,942.99—its lowest level since November 2025—the previous day.
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On Tuesday, the precious metal posted its first quarterly decline since January 2024.
A sell-off in U.S. Treasury bonds on Tuesday pushed the yield on benchmark 10-year notes up by 9 basis points. On Wednesday, the yield reached 4.465%, outpacing the rise in eurozone bond yields.
“The weakness [in gold] is partly due to comments (by Cleveland Fed President Beth) Hammack, who suggested that a rate hike might be necessary, as well as the fact that market participants have begun to price in slightly more rate hikes this year,” said UBS analyst Giovanni Staunovo.
Hammack said on Tuesday that she might advocate for higher interest rates if inflationary pressures do not ease.
According to the CME’s FedWatch tool, traders estimate the probability of a rate hike in the U.S. by September at nearly 67%.
Palladium fell 1.34% to $1,189.32 per ounce, while silver dropped 0.91% to $58.04 per ounce.
The price of platinum rose 0.25% to $1,555.1.
Expectations of further monetary tightening are not supporting investment demand, and gold exchange-traded funds have again been experiencing outflows in recent days, Stunovo noted, adding that increased price volatility is expected this week due to the release of macroeconomic data.
June U.S. employment data from ADP, as well as labor statistics scheduled for release on Thursday, may provide additional clues regarding the Fed’s future course.
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