Gold inches lower as firmer dollar, higher yields weigh
GLD•Spot gold fell 0.3% to $4,128.69 an ounce as a firmer dollar and rising Treasury yields pressured prices. Losses were limited by easing expectations of an October U.S. rate hike.
1. Gold prices ease
Spot gold slipped 0.3% to $4,128.69 per ounce by 0155 GMT, while U.S. gold futures were little changed at $4,156. The firm dollar made gold more expensive for holders of other currencies, and 10- and 30-year Treasury yields hit 24-year highs on Monday.
2. Rate outlook and risks
Expectations of a U.S. rate hike in October eased after data showed slower job growth in September and downward revisions to payrolls for the prior two months. Traders were still pricing an 87% probability of a December increase. Capital.com analyst Kyle Rodda said fundamentals remained supportive of gold in the long term, and identified Middle East geopolitical risk and changes in U.S. rate expectations as possible catalysts.
3. Other metals and Yemen
U.S. services activity slowed in September, while a measure of prices paid by businesses for inputs reached its highest level in more than four years. Separately, Saudi-backed Yemeni government forces retook coastal areas around the Bab el-Mandeb Strait, pushing Houthi forces out of most areas they seized last month. Silver fell 0.6%, platinum lost 0.7% and palladium eased 0.2%.
