Gold Rallies as Dollar and Treasury Yields Retreat

Gold prices climbed on Tuesday, supported by a slight dip in US Treasury yields and a weaker dollar. The safe-haven metal gained traction amid concerns over French bond market turmoil and broader worries about US Treasury markets. Spot gold rose 0.7% to $4,168.33 per ounce, while US gold futures for December delivery settled 0.7% higher at $4,187.10.

Analyst Jim Wyckoff from American Gold Exchange noted the increased safe-haven demand for gold due to financial instability in Europe and the US. The US 10-year Treasury yield retreated after hitting a more than two-decade high on Monday, and the dollar eased from a one-year peak, making gold more affordable for foreign investors.

Investors are now awaiting the minutes from the Federal Reserve's September meeting, set to be released on Wednesday, to assess the likelihood of further interest rate hikes. While the chances of a rate hike this month have dropped to 22%, traders still see an 84% probability of an increase in December. Higher interest rates typically reduce gold's appeal as a non-yielding asset.

Despite near-term challenges, analysts at TD Securities remain optimistic about gold's long-term prospects, predicting the metal will surpass $5,000 per ounce by 2027. Meanwhile, silver rose 0.8%, while platinum fell 1% and palladium remained unchanged.