Gold Dips as Stronger Dollar and Higher Yields Apply Pressure
Gold prices dipped slightly on Tuesday, influenced by a stronger US dollar and rising Treasury yields. Spot gold fell 0.3% to $4,128.69 per ounce by 0155 GMT, while US gold futures saw minimal change at $4,156.00. The firmer dollar made gold more expensive for investors using other currencies, adding pressure to the precious metal.
The 10- and 30-year Treasury yields reached 24-year highs on Monday, reflecting ongoing bond market weakness. Analyst Kyle Rodda noted that while long-term fundamentals support gold, the next major catalyst could come from geopolitical risks in the Middle East or changes in US rate expectations.
Market expectations of a US rate hike in October have eased following weaker-than-expected job growth data in September. However, traders still see an 87% probability of a December rate increase, according to CME’s FedWatch Tool. Higher interest rates typically reduce demand for non-yielding assets like gold.
Elsewhere, the US services sector showed signs of slowing in September, while inflation pressures persisted due to strong domestic demand. In geopolitical news, Saudi-backed Yemeni forces advanced to retake areas around the Bab el-Mandeb Strait from Iran-backed Houthis. Among other metals, silver, platinum, and palladium all experienced minor declines.