Gold Falls as Higher Dollar, Climbing Treasury Yields Take Toll

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Gold Falls as Higher Dollar, Climbing Treasury Yields Take Toll

general :: 2025-02-27 :: source - bloomberg

By Sybilla Gross and Preeti Soni

(Bloomberg) -- Gold fell as the US dollar strengthened and Treasury yields climbed, putting pressure on the precious metal after it reached a record on Monday.

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Bullion traded near $2,900 an ounce and has fallen about 2% since hitting its latest all-time high. A stronger dollar makes bullion less appealing for investors holding other currencies as it’s priced in the US currency, while higher Treasury yields also impact gold as it doesn’t pay interest.

Gold’s recent record-breaking run has been broadly supported by haven demand, amid concern and increasing confusion over US President Donald Trump’s plan to enact sweeping tariffs. On Wednesday, he said his administration would impose tariffs of 25% on the EU, while a White House official later said the deadline for Canada and Mexico tariffs remained March 4 and Trump had not yet decided whether to grant another extension.

Trump’s comments on the timing, size and targets of his tariffs have frequently confounded global markets, while his geopolitical moves have also underscored bullion’s role as a store of value in uncertain times. Additionally, new research suggests the president’s planned levies on imports from China may hit the American economy more than official US trade data indicate.

Looking ahead, investors will be analyzing the Federal Reserve’s preferred inflation gauge on Friday for more clues about monetary policy. Treasury investors anticipate the central bank will shift its focus from inflation to growth. Lower borrowing costs tend to benefit gold, as it doesn’t pay interest.

Spot gold declined 0.8% to $2,893.49 an ounce as at 1:45 p.m. in Singapore. The Bloomberg Dollar Spot Index advanced by 0.2%. Silver, platinum and palladium all fell.