Gold prices hits lowest level in a week on higher US Treasury yields
- Gold prices fell to their lowest in almost a week on Wednesday, as the dollar strengthened.
- U.S. President Donald Trump said the U.S. will withdraw from the Iran nuclear deal.
- Meanwhile, Trump and Chinese President Xi Jinping discussed ongoing trade issues.
Gold prices fell to their lowest in almost a week on Wednesday, as the dollar strengthened after U.S. President Donald Trump's decision to pull the United states out of the Iran nuclear deal boosted oil prices and pushed Treasury yields higher.
Raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies, Trump said he would reimpose U.S. economic sanctions on Iran that had been lifted under the 2015 agreement.
The dollar rose against the yen as oil prices climbed to a 3-1/2-year high, pushing yields on the benchmark 10-year Treasury note closer to 3 percent.
Spot gold had fallen $1,305.16 an ounce, before trading 0.1 percent lower at $1,312.61.
U.S. gold futures for June delivery settled down 70 cents at $1,313.
"(Gold is) stuck between rising geopolitical risks and the stronger U.S. dollar. The safe-haven buying certainly hasn't been as strong as we thought it might have been following Trump's announcement," said ANZ analyst Daniel Hynes.
During times of political or economic uncertainty, gold prices often receive a boost as the metal is widely considered a safe-haven asset alongside the Japanese yen.
"An escalation (in tensions) in the Middle East will create volatility in the financial markets and as such healthier conditions for the safe-haven asset," Benjamin Lu, commodities analyst at Singapore-based broker Phillip Futures, said in a note.
Meanwhile, Trump and Chinese President Xi Jinping discussed ongoing trade issues on Tuesday, as both sides continue to position themselves amid a heated feud over tariffs between the world's two largest economies.
Spot gold may revisit its May 1 low of $1,301.51 per ounce as it failed three times to break resistance at $1,317, said Reuters technical analyst Wang Tao.