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Gold, Copper, Silver Fall Amid Rising Yields and Stronger Dollar

Created at 3 Jun · 10:07 PM4 sources↑ Market-relevant4 events
IN SHORT

Gold futures fell below $4,500, Treasury yields rose above 4.5%, and the dollar index rallied. Copper futures dropped 2% from near all-time highs, and silver futures slipped below $75 an ounce.

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Key Numbers

$4,500gold futures price level
4.5%Treasury yields
$97July WTI Crude Oil futures price
2%copper price drop
$75silver price level

Who's Involved

Phillip Streible
commentator on gold futures pressure
Federal Reserve
influences interest rate outlook
CME FedWatch Tool
indicates probability of Fed rate decisions

↳ Why This Matters

Rising Treasury yields increase the opportunity cost of holding non-yielding assets like gold, while a stronger dollar makes dollar-denominated commodities more expensive for foreign buyers. Pressure on industrial metals like copper and silver can signal concerns about global economic growth.

Key facts

  • Gold futures fell below $4,500.
  • Treasury yields rose above 4.5%.
  • The dollar index rallied.
  • Copper futures dropped 2% from near all-time highs.
  • Silver futures fell below $75 an ounce.
  • July WTI Crude Oil futures reached $97 a barrel.

Gold futures experienced a decline, falling below $4,500 amid rising Treasury yields and a rallying dollar index. This pressure on gold coincides with an escalation of tensions in the Middle East, which has also influenced oil prices, with July WTI Crude Oil futures extending to $97 a barrel. The overall interest rate outlook reflects these conditions. According to the CME FedWatch Tool, there is a 98.4% probability that the Federal Reserve will leave rates unchanged at the June 17 meeting, and a 25% chance of a 25 basis point hike in September. In the broader industrial metals complex, Copper futures faced rejection near all-time highs before dropping 2%, while Silver futures slipped below $75 an ounce, indicating a general downward pressure across these commodities.

Frequently asked questions

Rising Treasury yields increase the opportunity cost of holding non-yielding assets like gold, making interest-bearing investments more attractive. A stronger dollar also tends to make dollar-denominated commodities like gold more expensive for holders of other currencies.

Elevated crude oil prices can contribute to inflation concerns, which in turn influences central bank monetary policy decisions and can impact investor appetite for riskier assets.

The tool suggests a very high probability that the Federal Reserve will maintain current interest rates at their June meeting, but it also indicates a notable chance of a rate hike in September, reflecting ongoing uncertainty about inflation and economic conditions.

Copper and silver are considered industrial metals, and their prices can be sensitive to global economic growth expectations and demand from manufacturing sectors. Pressure on these metals may indicate concerns about future economic activity.

What Happens Next

01Federal Reserve meeting on June 17.
02Potential Federal Reserve rate hike in September.

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Cadence
CME Headlines
  • 10-Year Treasury Note yields rose on Middle East supply risks.
    8 Jul · 8:03 PM
  • 10-Year Treasury Note yields rose on Middle East supply risks.
    8 Jul · 8:03 PM
  • Japanese Yen futures fell near multi-decade lows.
    8 Jul · 7:57 PM

How It Developed

4 Jun · 2:23 AM
Gold prices rose due to a softer dollar and oil price increases, as markets reassess US-Iran peace prospects.
Economic Times via PiQSuite
3 Jun · 9:47 PM
Gold prices are under pressure from rising interest rate expectations as investors await the U.S. payrolls report.
Seeking Alpha via PiQSuite
3 Jun · 8:08 PM
Gold futures fell below $4,500 due to Middle East tensions, rising Treasury yields, and a stronger dollar.
CME Group | Metals via PiQSuite
3 Jun · 2:19 PM
Gold prices are pressured by higher rate expectations as investors await U.S. economic data.
Yahoo News | Finance Top Stories via PiQSuite

Sources

T1
Gold under pressure from higher rate expectations, while investors await U.S. payrolls reportm.piqsuite.com
T1
Gold futures dropped below 4,500 amid rising Treasury yields.m.piqsuite.com
T1
Gold Pressured by Higher Rate Expectations While Investors Await U.S. Datam.piqsuite.com
T1
Gold rises on softer dollar, oil as markets weigh US-Iran peace optimismm.piqsuite.com

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