Gold slips as rising oil prices, Treasury yields dent appeal
GLD•Spot gold fell 0.6% to $4,261.55 an ounce, its lowest since September 17, as rising oil prices and US Treasury yields weighed on demand. US 10-year Treasury yields were near a two-decade high, and traders priced a 69% chance of an October rate hike.
1. Gold prices ease
Spot gold fell 0.6% to $4,261.55 per ounce by 1206 GMT, after touching its lowest level since September 17. US December gold futures eased 0.5% to $4,296.30.
2. Yields and oil rise
US 10-year Treasury yields hovered near a two-decade high, increasing the opportunity cost of holding non-yielding gold. Oil prices extended gains after rising 4% in the previous session, while traders priced a 69% chance of an October rate hike.
3. Outlook for metals
Capital Economics economist Hamad Hussain said elevated oil prices and Treasury yields could limit gold’s scope to rise and could result in further declines. Intesa Sanpaolo economist Daniela Corsini said the firm expected precious metals to lack clear direction, with volatility likely to remain high; gold could trade near an average of $4,200 per ounce for a couple of quarters.
