Gold slumped as uncertainty about the US interest rate path pushed bond yields higher.
Gold continued its decline with new pressure from bond yields after US economic data affected the Fed’s outlook on the possible interest rate path.
Spot gold tested below $1,955 an ounce.
Yields on 10-year bonds in the US rose 1 percent after critical inflation and labor costs indicators showed signs of cooling, despite an unexpected acceleration in second-quarter growth.
Both assets rose this month as data pointing in the opposite direction contributed to volatility in bond yields and under the spotlight.
On the other hand, swap investors are pricing in Wednesday’s decision to push the interest rate range to a target range of 5.25 percent to 5.5 percent, which will likely be the Fed’s last hike in this cycle.
On the Chinese side, while new measures are announced to increase consumption, it is evaluated that this move may increase gold purchases in the country, which is the world’s largest gold importer.