Gold Prices Fall as Stronger Dollar and Higher Yields Weigh In
Gold prices fell on Tuesday as a stronger US dollar and higher Treasury yields weighed on bullion. Spot gold was trading near $4,031.00 an ounce, down 1.09% on the session. The metal remained above the $4,000 support area.
The firmer US dollar and elevated Treasury yields are putting pressure on precious metals ahead of this week's Federal Reserve decision. Market positioning following recent significant US economic data remains less dovish than earlier reactions to consumer price and producer price data had suggested.
Despite softer inflation and weaker durable-goods orders, stronger retail sales, low jobless claims, firmer business activity, and improved consumer sentiment have limited expectations for a clear shift in Federal Reserve policy. Markets still expect the Fed to hold interest rates at this week's meeting, but the possibility of a rate hike remains a meaningful risk.
Oil and energy-related inflation pressures also continue to add uncertainty over the central bank's policy outlook. The 10-year Treasury yield was near 4.62%, while the 2-year Treasury yield was near 4.31%.