Gold prices fell to one week lows on Tuesday as rising U.S. Treasury yields dampened investor demand for the precious metal.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were down $7.60 or 0.58% to $1,310.60 a troy ounce by 03:59 AM ET (07:59 AM GMT), the lowest since May 8.
The yellow metal slid as the yield on 10-year U.S. Treasury notes ticked up to 3.025%, the highest level in three weeks. A rise above the high of 3.035% reached on April 25 would take it to its highest since early 2014.
Higher Treasury yields can spell weakness for gold which, like other commodities, offers no yield.
U.S. bond yields were boosted by signs of easing trade tensions between the U.S. and China after U.S. President Donald Trump pledged to help Chinese technology company ZTE (HK:0763). Last month, the Trump administration barred U.S. companies from selling to ZTE, effectively crippling the company.
The dollar edged higher, with the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, last at 92.62, pulling away from Monday’s lows of 92.11, the weakest since May 2.
A stronger U.S. currency makes dollar denominated gold more expensive for overseas buyers.
In other metals trading, July silver futures were down 1.11% to $16.46 a troy ounce, while July platinum futures shed 0.8% to trade at $907.60. July copper futures were off 0.26% at $3.085 a pound.
