Gold prices fell on Tuesday, pressured by a stronger dollar and higher U.S. Treasury yields, while expectations of lower odds of a U.S. interest-rate hike this month helped limit the precious metal’s losses.
Spot gold fell 0.3% to $4,128.69 an ounce by 01:55 GMT, while U.S. gold futures were nearly unchanged at around $4,156.
A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies. Meanwhile, yields on 10-year and 30-year U.S. Treasury bonds rose on Monday to their highest levels in 24 years, amid a sell-off in the bond market.
Kyle Rodda of Capital.com said the long-term fundamentals for gold remained supportive, noting that geopolitical developments in the Middle East could be the next major catalyst. He added that any significant shift in expectations for U.S. interest rates could trigger a sharp move in gold prices.
Expectations for a U.S. rate hike in October declined after data showed employment growth slowed more than expected in September, while employment figures for the previous two months were revised lower.
Traders currently see an 87% probability of a U.S. rate hike in December, according to CME Group’s FedWatch tool.
Higher interest rates increase the opportunity cost of holding gold, which does not generate income.
U.S. economic data showed that activity in the services sector slowed in September, while domestic demand remained strong, putting pressure on supply chains. The input prices index rose to its highest level in more than four years, suggesting inflationary pressures could persist into 2027.
Other precious metals also declined. Silver fell 0.6% to $60.67 an ounce, platinum dropped 0.7% to $1,710.08, and palladium declined 0.2% to $1,170.15.
Source: Reuters
