Gold prices fell on Wednesday, reaching their lowest level in one and a half months, as high U.S. Treasury yields and a strong dollar outweighed optimism regarding a potential peace agreement between the U.S. and Iran.
As of 06:15 GMT, spot gold was down 0.2% to $4,472.09 per ounce, hitting its weakest point since March 30. Meanwhile, U.S. gold futures for June delivery dropped by 0.8% to $4,475.
“Gold is running out of puff somewhat against this backdrop of rising yields and a dollar which has a spring in its step courtesy of the hawkish shift in the rates outlook,” noted Tim Waterer, chief market analyst at KCM Trade.
The dollar was stable at a six-week high, making gold more expensive for holders of other currencies. Additionally, benchmark 10-year U.S. Treasury yields remained steady at their highest levels in over a year, elevating the opportunity cost associated with holding non-yielding gold.
Mixed signals emerged from U.S. discussions regarding Iran, with President Donald Trump warning about potential military action, while Vice President JD Vance indicated that both parties were making progress and wished to avoid a return to conflict.
Philadelphia Federal Reserve Bank President Anna Paulson stated that current interest rates are appropriate for the time being, helping to apply downward pressure on inflation as price pressures persist. She also mentioned that it is “healthy” for investors to consider scenarios where rates might need to rise.
Most economists polled by Reuters anticipate that the Federal Reserve will refrain from cutting rates this year, pushing long-standing predictions for reductions into next year, based on hopes that the current surge in inflation is temporary.
Investors are awaiting the minutes from the Fed’s April policy meeting, scheduled for release later in the day, to better assess the central bank’s monetary policy outlook.
In contrasting market movements, spot silver increased by 1.1% to $74.64 per ounce, platinum rose by 0.2% to $1,925.30, and palladium climbed by 0.9% to $1,366.
Published on May 20, 2026
