Gold Prices Drop Slightly as U.S. Treasury Yields Rise

Market Overview

China

The offshore Chinese yuan (CNY) held steady around 7.17/USD after President Trump announced a new round of tariffs on 14 countries, though implementation was delayed until August 1. The delay, along with a slightly weaker USD, helped support the yuan.

Market sentiment was also lifted by news that China may double the quota for the Southbound Bond Connect, accelerating yuan internationalization. The PBOC set the daily reference rate at 7.1534—weaker than the previous fix but stronger than expected.  Investors now await June CPI, PPI, and trade data, which are expected to remain weak.

Japan 

The USD continued to strengthen against the Japanese yen, reaching 146.85 (+0.25%) amid escalating U.S.–Japan trade tensions. President Trump announced more trade measures following the 25% tariff on Japanese imports, as talks stall—especially over Japan's rice market protection.

Meanwhile, both U.S. and Japanese bond yields rose, reflecting fiscal concerns ahead of Japan’s July 20 upper house elections. Domestically, the Bank of Japan is closely monitoring the indirect impact of rising rice prices on core inflation.

Bitcoin (BTCUSD)

Fundamental Analysis

Elon Musk continues to criticize the Trump administration’s public spending policies and debt ceiling hikes, calling them a “debt bomb” threatening U.S. financial stability. Amid a lack of traditional solutions, Musk, along with experts from Bitwise and Sentora, emphasized that Bitcoin could serve as an alternative—acting as “digital gold” to help control inflation and ease interest rate pressures.

Rising outflows from exchanges show institutional accumulation. Japanese firms like Remixpoint and Meta planet are pivoting to Bitcoin-focused financial strategies.
 
Technical Analysis

Price is consolidating sideways around the $108,000–$109,800 range after rebounding from strong support at $102,374.The upward-sloping EMA34 and EMA89 support a mild bullish trend.
 
EMA200 provides long-term support near $106,500. The structure leans toward recovery, but lacks strong momentum for a breakout.

EURUSD

Fundamental Analysis

The U.S. dollar continued to strengthen amid rising trade tensions. The USD rose against the JPY and maintained its upward momentum against a basket of major currencies, while the EURUSD edged down 0.04% to around 1.1720.

In the short term, the euro may remain under pressure if the USD continues to be supported by higher Treasury yields and expectations of a hawkish Fed stance. However, the EU may be granted an exemption from the 10% base tariff by the U.S., which could help the euro retain some stability.
 
Technical Analysis

The overall trend remains medium-term bullish but is showing signs of weakening. Price has pulled back from the 1.18297–1.18094 resistance zone and is now retesting short-term support around 1.1716.
 
Volume hasn’t spiked during the recent drop, suggesting no panic selling yet. However, a strong bearish candle with high volume could confirm a support break.

Gold Spot (XAUUSD)

 
Fundamental Analysis

Gold prices edged down slightly in the Asian session this morning, pressured by rising U.S. Treasury yields and diminished rate-cut expectations following strong jobs data. Spot gold slipped 0.1% to $3,297.76/oz, while August gold futures dropped 0.8% to $3,307/oz. The 10-year Treasury yield stood at 4.426%, increasing the opportunity cost of holding non-yielding assets like gold.
 
Market sentiment was also weighed by uncertainty surrounding President Trump's tariff policy. Although the new tariff plan has been postponed until August 1, the lack of clarity on U.S. trade policy is prompting investor caution.

Technical Analysis

Price is moving sideways within a narrow range, forming a lower-high structure from the $3,451 peak.EMA34, EMA89, and EMA200 are slightly sloping downward, indicating a short-term bearish bias.
 
Volume: No clear breakout, but slight volume increases during recent dips suggest possible distribution.

 

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