Gold Falls 0.3% as Dollar and Treasury Yields Weigh on Prices

Spot gold fell 0.3% in an early Tuesday snapshot as a firmer dollar and higher Treasury yields weighed on prices. Traders’ reduced expectations for an October Federal Reserve rate hike offered some support.

Gold traded at $4,128.69 an ounce at 9:55 p.m. ET Monday (1:55 a.m. UTC Tuesday). U.S. gold futures were little changed at $4,156. These prices were recorded early Tuesday; they are not closing prices.

A stronger dollar makes gold more expensive for buyers using other currencies. Higher Treasury yields can also weigh on the metal because it does not pay interest. The 10-year and 30-year Treasury yields reached 24-year highs Monday.

Traders pared bets on an October Fed rate increase after September payroll growth came in weaker than expected and earlier months’ job gains were revised lower. Interest rate swaps implied nearly a 23% chance of an October increase. Markets continued to price in a quarter-point increase by December; those figures reflect market expectations, not a Fed commitment.

Investors are watching for the Fed’s September meeting minutes, scheduled for release Wednesday, Oct. 7, at 2 p.m. ET (18:00 UTC). The minutes may provide more detail on policymakers’ discussion of inflation, employment and interest rates.