Gold fell for a third consecutive session on Wednesday, as rising US Treasury yields and growing bets that the Federal Reserve will raise interest rates pressured the non-yielding metal. Spot gold was down 0.8% at $3,974.75 per ounce as of 0849 GMT, after touching its lowest level since last November at $3,942.99 in the previous session. US gold futures for August delivery lost 1.3% to $3,987.70/oz. The yellow metal on Tuesday recorded its first quarterly loss since January 2024, Reuters reported. A selloff in US Treasuries on Tuesday pushed the benchmark 10-year yield up as much as 9 basis points before it backed off the highs. By Wednesday, yields were rising again, up 4 bps at 4.465%, outpacing increases in euro zone bond yields. A stronger US dollar makes bullion less affordable for overseas buyers. "The weakness is a bit driven by comments from Fed's Hammack, suggesting a rate hike might be needed and market participants pricing in a bit more rate hikes for this year," said UBS analyst Giovanni Staunovo. Federal Reserve Bank of Cleveland President Beth Hammack said on Tuesday she may advocate for higher rates if inflation pressures don’t moderate. According to CME FedWatch tool, traders see a nearly 67% chance of a rate hike by September. Expectations for more hikes are not helping investment demand, and ETF holdings have seen renewed outflows in recent days, said Staunovo, noting that price volatility is expected around economic data releases this week. June ADP employment data, due at 1215 GMT, and Thursday's nonfarm payrolls report could give further clues on the Fed's policy path. Markets will also closely watch the European Central Bank's annual Sintra conference on Wednesday, where Fed Chair Kevin Warsh and ECB President Christine Lagarde are due to speak. On the geopolitical front, concerns persisted over the prospects for US-Iran diplomacy after Tehran said it would not meet senior US envoys who travelled to the region following the recent outbreak of hostilities. Spot silver fell 1.4% to $57.75 per ounce. Platinum slipped 0.6% to $1,542.70, after hitting its lowest point since November. Palladium slid 1.4% to $1,187.01.
