Gold inches lower as firmer dollar, higher yields weigh

Gold eased on ​Tuesday, pressured by a firmer US dollar and rising Treasury yields, though ‌losses were limited by easing expectations of a Federal Reserve interest rate hike this month.

Spot gold slipped 0.3% to $4,128.69 per ounce by 0155 GMT. US gold futures were little changed ​at $4,156.00.

The dollar held firm, making greenback-denominated commodities more expensive for holders ​of other currencies.

The 10- and 30-year Treasury yields hit 24-year highs ⁠on Monday as persistent bond market weakness weighed on sentiment.

“Fundamentals remain supportive of ​gold in the long term. The next big catalyst is likely to stem ​from geopolitical risk in the Middle East,” said Kyle Rodda.

“Alternatively, a significant change in US rate expectations could provide an impetus for the next break-out, ​so every piece of price data will be important.”

Expectations of a US rate ​hike in October eased after data on Friday showed US job growth slowed more than expected ‌in ⁠September and nonfarm payrolls for the prior two months were revised lower.

Traders are still pricing an 87% probability of an increase in December, according to CME’s FedWatch Tool.

Higher interest rates increase the opportunity cost of holding non-yielding gold.

Data showed US services ​sector activity slowed in ​September, while strong ⁠domestic demand stretched supply chains and pushed a measure of prices paid by businesses for inputs to its highest level ​in more than four years, suggesting inflation could remain elevated ​into 2027.

Elsewhere, ⁠Saudi-backed Yemeni government forces staged a lightning advance to retake the coast around the Bab el-Mandeb Strait up to the city of Mocha, the government said, pushing the ⁠Iran-backed Houthis ​out of most of the areas they ​seized last month.

Among other metals, spot silver fell 0.6% to $60.67, platinum lost 0.7% to $1,710.08 and palladium eased ​0.2% to $1,170.15.