Gold prices moved lower during these moments of trading on Tuesday, with the rise of the US dollar and Treasury bonds.
Investors are awaiting the Fed's favored inflation report for more signals on whether the Fed will raise interest rates again this year.
Gold and dollar now
Gold futures fell 0.3% to $1,930 an ounce.
While spot gold contracts fell by 0.2% to $1,912 per ounce.
On the other hand, the dollar index rose by 0.12% to 105.812 points.
Gold at settlement yesterday
Gold prices fell at the settlement of trading yesterday, Monday, following the gains of the dollar and the rise in 10-year US bond yields to the highest level since October 2007.
Upon settlement, gold futures for December delivery fell by 0.45%, or $9, to reach $1,936.6 per ounce.
The dollar drops gold
The dollar hit a 10-month high, while benchmark 10-year Treasury yields continued their climb to a new 16-year peak, weighing on non-interest-bearing gold, which is priced in dollars.
A majority of Federal Reserve policymakers expect another rate hike in the next three months, but investors continue to price in only a 50% chance of further monetary tightening in 2023, forecasts published Wednesday showed.
While the President of the European Central Bank explained that the bank’s future decisions will ensure that key interest rates are set at sufficiently restrictive levels for the longest necessary period, while continuing domestic price pressures.
“While we believe the US dollar's rise will continue until the end of the year, stronger expectations for interest rate cuts and slower economic growth momentum will see the dollar fall again next year,” ANZ analysts wrote in a note.
They said a temporary pause in Fed interest rate hikes would provide some support for gold.
Meanwhile, investors are keeping an eye on the Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred measure of inflation, due for release on September 29.
Spot gold may break support of $1,913 per ounce, towards the $1,901-$1,908 range, according to Reuters technical analyst Wang Tao.
Meanwhile, the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.1% on Monday to their lowest level since January 2020.
other metals
Spot silver fell 0.6% to $22.97 an ounce, platinum fell 0.5% to $906.12, and palladium fell 0.3% to $1,225.41.
“Silver faces a double blow: expectations of higher US interest rates, which limits its investment attractiveness, and the weakness of the Chinese economy, which affects industrial demand,” ANZ analysts said.
