Gold prices edged higher on Tuesday as US Treasury yields declined, although expectations of higher interest rates limited the gains.
Spot gold rose 0.3% to $4,357.31 per ounce by 00:52 GMT, while US gold futures for December delivery also gained 0.3% to $4,395.
The yield on 10-year US Treasury notes fell for a second consecutive session.
Gold is viewed as a hedge against inflation and geopolitical risks, but its appeal tends to decline when interest rates rise, as investors favor assets that generate returns.
The Federal Reserve raised its benchmark interest rate by a quarter percentage point last week and indicated that further increases could be implemented in the coming months.
St. Louis Federal Reserve President Alberto Musalem said the US central bank would likely need to raise interest rates further to curb inflation driven by strong demand, as well as commodity price shocks that have extended beyond the oil sector. He added that it would be better for the central bank to act sooner rather than wait.
On the geopolitical front, Houthi fighters moved on Monday to seize strategic highlands in Yemen, seeking to cut off the Red Sea coast from other areas controlled by the Saudi-led coalition supporting Yemen’s government. The move came after a report that US President Donald Trump had called off planned strikes against the Houthis at the last minute.
Meanwhile, Trump is attending the United Nations General Assembly meetings this week ahead of a scheduled meeting on Thursday with Chinese President Xi Jinping.
Among other precious metals, spot silver rose 0.7% to $66.48 per ounce, platinum gained 0.8% to $1,811.28, and palladium advanced 0.7% to $1,309.78.
Source: Reuters
