Gold inches lower as firmer dollar, higher yields weigh
GLD•Spot gold fell 0.3% to $4,127.87 an ounce as a firmer dollar and elevated Treasury yields pressured prices. Losses were limited by easing expectations of a Federal Reserve rate hike this month.
1. Gold prices ease
Spot gold slipped 0.3% to $4,127.87 per ounce by 0620 GMT, while U.S. gold futures were little changed at $4,155.30. The dollar held firm, and 10- and 30-year Treasury yields had hit 24-year highs on Monday.
2. Rate expectations shift
Expectations of a U.S. rate hike in October eased after data showed slower-than-expected job growth in September and downward revisions to payrolls for the prior two months. Traders were pricing an 87% probability of a December increase. Higher rates increase the opportunity cost of holding non-yielding gold.
3. Other market factors
An analyst said long-term fundamentals remained supportive of gold and identified Middle East geopolitical risk as a likely catalyst. 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. Silver, platinum and palladium each fell 0.7%.
