Gold Prices Drop as Bond Yields Rise and Investors Take Profits
Gold prices declined on Tuesday, dropping more than 1% as rising U.S. Treasury yields and profit-taking weighed on the market, following a recent six-week high.
The price of gold fell by $54, closing at $4,220.80 per ounce, while November gold futures decreased by 1% to $4,227.70.
Independent analyst Ross Norman noted, "The strength of the dollar, rising Treasury yields, and profit-taking have collectively diminished gold's appeal."
Investors are awaiting comments from Federal Reserve Chairman Jerome Powell later today, which may offer insights into future monetary policy. According to the CME Group's "FedWatch" tool, there is an 88% probability of a rate cut at the Fed's December meeting.
In related developments, White House economic advisor Kevin Hassett expressed his willingness to assume the role of Federal Reserve Chairman if appointed. U.S. Treasury Secretary Scott Pruitt suggested that a new chair could be appointed before Christmas. Both Hassett and President Donald Trump favor a low-interest-rate environment, which is generally supportive for non-yielding assets like gold.
The market is also focused on key economic data this week, notably the November employment figures due on Wednesday and the September personal consumption expenditures index set for release on Friday.
Carlo Alberto De Casa, an analyst at Swissquote Group, projected that gold will likely remain between $4,000 and $4,400 in the coming weeks.
In the silver market, prices fell from a record high of $58.83 reached on Monday, closing at $57.42 per ounce, a decrease of 0.9%. Silver has increased by 98% since the start of the year, bolstered by gold's rise, ongoing supply shortages, and its inclusion in a draft list of critical minerals in the U.S.
Other precious metals saw varied movements, with platinum decreasing by 2.1% to $1,622.56, while palladium increased by 3% to $1,442.22 per ounce.
