Gold prices dipped on Tuesday as a stronger dollar and rising Treasury yields weighed on the metal. Spot gold fell 0.5% to $3,927.18 per ounce, after an earlier decline took it to a session low of $3,893.31. US gold futures for December delivery settled 0.7% lower at $3,940.40 per ounce. The drop came despite a brief rally earlier in the day, fueled by a decline in oil prices that eased some inflation concerns.
Phillip Streible, chief market strategist at Blue Line Futures, noted that the dollar's strength and higher yields were pressuring gold. The greenback rose modestly as investors assessed uncertainty over a potential US-Iran deal and the outcome of the midterm elections. Treasury yields also edged higher, further impacting gold's performance.
Attention is now focused on the US midterm elections, with polls favoring Democrats to take control of the House. Fawad Razaqzada, market analyst at Forex.com, suggested that a Democratic clean sweep could weaken the dollar, potentially providing some support for gold. Meanwhile, traders see a 79% probability of the Federal Reserve raising rates in December, according to CME’s FedWatch Tool.
The World Gold Council adjusted its forecast for gold investment growth this year, cutting it to 200 metric tons from the previously estimated 400 tons. However, it raised its estimate for central bank purchases. Other precious metals also declined, with spot silver slipping 1.9% to $49.69 per ounce, platinum falling 1.9% to $1,421.18, and palladium dropping 3.4% to $935.73.