Gold Drops as Dollar and Bond Yields Climb

Gold prices dipped on October 6 as the U.S. dollar strengthened and Treasury yields climbed to their highest levels in 24 years. Spot gold fell 0.3% to $1,928.83 an ounce by 0400 GMT, while prices in Türkiye hovered around 6,520 Turkish Liras per gram.

The rise in U.S. 10-year and 30-year Treasury yields made gold, which does not pay interest, less appealing to investors. A stronger dollar also increased the cost for buyers using other currencies.

Despite slower growth in the U.S. services sector, data indicated ongoing inflation pressures. The Institute for Supply Management’s services index dropped slightly to 54.9 in September, but its prices measure surged to 74, the highest since July 2022.

Analysts pointed to geopolitical risks in the Middle East and shifts in U.S. interest rate expectations as potential catalysts for the next move in gold prices. Kyle Rodda, a senior financial market analyst at Capital.com, highlighted these factors in a recent interview.