Gold declines amid stronger dollar and higher Treasury yields
Gold prices edged lower on Tuesday, driven down by a stronger US dollar and higher Treasury yields. The precious metal saw a slight dip of 0.3%, bringing spot gold to US$4,128.69 per ounce by 0155 GMT. US gold futures remained relatively unchanged at US$4,156.00.
The dollar's strength made gold more expensive for investors using other currencies. Meanwhile, the 10- and 30-year Treasury yields hit 24-year highs on Monday, reflecting ongoing weakness in the bond market.
Analysts noted that while short-term pressures weighed on gold, long-term fundamentals remained supportive. Kyle Rodda, senior financial market analyst at Capital.com, highlighted that geopolitical risks in the Middle East could serve as the next major catalyst for gold prices. He also mentioned that shifts in US rate expectations might drive further movements.
Market expectations of a US rate hike in October have eased following weaker-than-expected job growth data. However, traders still see an 87% probability of a rate increase in December, according to CME's FedWatch Tool. Higher interest rates make holding non-yielding gold more costly.
Other precious metals also saw declines. Spot silver fell 0.6% to US$60.67, platinum dropped 0.7% to US$1,710.08, and palladium eased 0.2% to US$1,170.15.