Gold Holds Near $4,140 as Dollar and Treasury Yields Rise

Gold prices remained steady near $4,140 an ounce as the US dollar strengthened and Treasury yields climbed to multi-decade highs. The dollar reached close to its yearly peak due to turmoil in European bond markets, while rising yields added pressure on gold. The stronger dollar makes gold more expensive for buyers using other currencies, as the precious metal is priced in US dollars.

Spot gold traded at $4,139.06 an ounce as of 7:30 a.m. Singapore time, according to Bloomberg. The Institute for Supply Management reported that cost pressures in the services sector hit their highest level in over four years, reigniting inflation concerns. Despite this, Federal Reserve officials have indicated that another immediate rate hike is unlikely, with markets pricing in just a 25% chance of a rate increase at the upcoming Federal Open Market Committee meeting.

Gold has faced significant declines recently, falling over 6% last month and more than 20% since the US-Iran conflict began in late February. The declines have been driven by concerns over energy-driven inflation, potential rate hikes, and dollar strength. Meanwhile, silver held steady at $61.05 an ounce, platinum slipped slightly, and palladium edged higher.

Investors are also awaiting the release of the minutes from the Fed's September FOMC meeting, scheduled for October 7. The Fed raised its benchmark interest rate last month for the first time in three years, which can reduce the appeal of non-yielding gold compared to interest-bearing assets like Treasuries.