Fed Policy and Yields Weigh on Gold

Gold prices faced downward pressure as rising Treasury yields made the non-yielding asset less attractive for investors. Comments from a Federal Reserve official about the potential for further inflationary pressures reinforced market expectations for a higher-for-longer interest rate environment. This sentiment also contributed to broader pressures seen in European bond markets.

Geopolitical Risks Remain Elevated

Ongoing geopolitical developments are contributing to global uncertainty, a traditional driver for safe-haven assets. A U.S. Senate report highlighted the alleged use of the Tether stablecoin by Iran for funding purposes, while separate reports based on Russian budget documents indicate a planned 27% increase in military spending by 2027.

Emerging Market Financial Concerns Grow

Financial stability concerns are growing in some emerging markets, which could impact broader investor sentiment and risk appetite. Colombia has reportedly engaged in discussions with the International Monetary Fund over potential financing arrangements, and Brazil's national debt profile is seen as worsening due to a rising share of floating-rate securities.