Gold Prices Fall as Treasury Yields and Dollar Strengthen Ahead of Inflation Data
Gold prices fell on Tuesday as Treasury yields climbed and the dollar strengthened, with investors eyeing fresh inflation data set to be released. Gold dropped 0.8% to $2,599.56 an ounce, while futures for December rose 0.4% to $2,606.10 an ounce by 3:43 p.m. ET.
The rise in Treasury yields to four-month highs and the strengthening dollar have put pressure on gold prices. Traders are closely watching the upcoming U.S. inflation data, which is expected to show sticky inflation levels in October. This data will also impact expectations for interest rates. Some Federal Reserve speakers have mentioned the possibility of a rate pause if inflation surprises to the upside before the December meeting.
Traders are currently pricing in a 62.1% chance of another 25 basis points cut in December, with a 38% chance that rates will remain unchanged. Other precious metals, such as silver and platinum, were mixed on Tuesday, with silver falling 1.6% to $954.45 an ounce and platinum rising 0.8% to $30.863 an ounce.
In the industrial metals sector, copper prices retreated on Tuesday due to disappointing fiscal measures in China. Benchmark copper on the London Metal Exchange fell 1.7% to $9,148.00 a ton, while December futures dropped 2% to $4.1455 a pound. China recently approved 10 trillion yuan ($1.4 trillion) in new debt measures to support local governments, but traders were disappointed by the lack of targeted measures for personal consumption and property markets, especially in light of increased trade tariffs under the Trump administration.
Analysts at JPMorgan believe that China is likely to unveil more targeted fiscal measures in the future as Beijing navigates the implications of a Trump presidency. Overall, the current market conditions are influenced by a combination of economic data, geopolitical factors, and central bank policies, making it crucial for investors to stay informed and adapt their strategies accordingly.