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Gold nears a one-week low amid firmer US dollar and yields

The gold price hovered near its lowest level in over a week on Wednesday, under pressure due to a stronger U.S. Dollar and rising Treasury yields. Meanwhile, fresh tariff threats by U.S. president Donald Trump unnerved the markets.

As of 0234 GMT, spot gold remained at $3.301.50 an ounce. U.S. Gold Futures dropped 0.2% to $3310.10.

Trump announced that he would impose tariffs of 50% on imported copper, and levy the long-promised levies against semiconductors and pharmaceuticals.

Trump reiterated on Tuesday his threat to impose 10% tariffs on BRICS countries. A day earlier, he had notified 14 countries including Japan and South Korea of the tariff increases that would take effect August 1.

The U.S. Dollar Index steadied on Wednesday after reaching a new two-week-high late Tuesday. Meanwhile, the yield of benchmark 10-year U.S. Treasury Notes hovered around a three week high.

Ilya Spirak, global macro head at Tastylive said: "Gold prices have held up well against the backdrop of rising yields as well as a stronger dollar. Its ability to resist pressure indicates underlying strength and bullish bias."

A higher yield increases the cost of non-yielding gold, while a weaker US dollar makes it more affordable to holders of other currencies.

Investors are closely examining the minutes of the latest U.S. Federal Reserve meeting, which is due later today, to look for any hints about possible interest rate reductions, despite the central bank’s wait-and see approach.

Spivak stated that "it's been a quiet week in terms of economic data. However, the reaction of prices to the minutes from the June FOMC meeting could help determine where we stand on this debate between Fed and markets."

The New York Fed's most recent survey showed that Americans' expectations for inflation remained unchanged. One-year inflation was estimated at 3% in the latest survey, down from the 3.2% of May. Three- and five year inflation expectations were also maintained at 3% and 2,6% respectively.

Spot silver dropped 0.5% to $36.58 an ounce. Platinum was down 0.8% to $1,348.78, and palladium fell 0.4%, falling from $1,106.29.

(source: Reuters)