Gold prices extended their losses on Tuesday as investors adopted a cautious stance ahead of the release of minutes from the U.S. Federal Reserve’s latest policy meeting, while a stronger U.S. dollar and rising Treasury yields added pressure to the precious metal.

Spot gold fell around 1% to trade near $4,124 per ounce, while U.S. gold futures slipped roughly 0.8% to about $4,136 per ounce during early trading. The decline came as the U.S. dollar strengthened against major currencies and benchmark 10-year Treasury yields climbed to their highest level in two weeks, reducing the appeal of non-yielding assets such as gold.

Market participants are closely watching the minutes of the Federal Reserve’s June policy meeting, scheduled for release on Wednesday, for clues about the future path of U.S. interest rates. At that meeting, the Fed kept its benchmark rate unchanged at 3.5%–3.75%, but several policymakers signaled that additional tightening could still be warranted later this year if inflation remains elevated.

Investors are also assessing the policy approach of new Federal Reserve Chair Kevin Warsh, who has emphasized a more data-dependent strategy and indicated that the central bank should avoid providing extensive forward guidance on future rate decisions. Analysts say the Fed minutes could offer valuable insight into how officials view inflation, labor market conditions, and the likelihood of further rate hikes.

The precious metal had rallied last week after weaker-than-expected U.S. labor market data raised hopes that the Fed might delay additional monetary tightening. However, those gains have largely been reversed as bond yields and the dollar recovered.

Adding to market uncertainty are ongoing geopolitical developments in the Middle East. Concerns over maritime security near the Strait of Hormuz and the potential impact on global energy supplies have supported oil prices, fueling fears that inflationary pressures could persist and complicate the Fed’s policy decisions.

Despite the recent pullback, some analysts note that gold continues to receive support from strong central bank demand. China’s central bank, for example, has reportedly expanded its gold reserves for a 20th consecutive month, underscoring continued official-sector interest in the metal as a strategic reserve asset.

With markets currently pricing in a significant possibility of another Fed rate increase later this year, investors are expected to scrutinize every detail of the upcoming meeting minutes for indications of whether policymakers remain concerned about inflation or are becoming more confident that price pressures are easing. The outcome could determine the near-term direction of gold prices. (ILKHA)