Gold Dips as Dollar Strength and Higher Yields Apply Pressure
Gold prices dipped slightly on Tuesday, facing pressure from a stronger US dollar and rising Treasury yields. Spot gold fell 0.3% to $4,128.69 per ounce, while US gold futures remained nearly unchanged at $4,156.00. The firm dollar made gold more expensive for investors using other currencies, contributing to the decline.
Despite the drop, losses were limited by easing expectations of a Federal Reserve interest rate hike in October. Data released on Friday showed slower-than-expected US job growth in September, reducing the likelihood of a rate increase this month. However, traders still see an 87% chance of a hike in December, according to CME's FedWatch Tool.
Analysts note that gold's long-term fundamentals remain supportive, with geopolitical risks in the Middle East serving as a potential catalyst. Kyle Rodda, senior financial market analyst at Capital.com, highlighted that changes in US rate expectations or new economic data could drive the next significant move in gold prices.
Other precious metals also declined, with spot silver down 0.6% to $60.67, platinum losing 0.7% to $1,710.08, and palladium easing 0.2% to $1,170.15. Meanwhile, tensions in the Middle East escalated as Saudi-backed Yemeni forces advanced to retake key areas around the Bab el-Mandeb Strait.