Gold drops more than 1% as US Treasury yields hit highs
Gold prices fell more than 1% to around $4,375 an ounce Tuesday, pressured by elevated US Treasury yields. Traders look to US labor-market data for clues on the Fed’s path, with rate-hike odds near-term.
Gold prices fell more than 1% to around $4,375 an ounce on Tuesday, marking the metal’s lowest level since August 19, as elevated US Treasury yields weighed on the non-yielding asset. Investors are also waiting for key US labour-market data for fresh clues on the Federal Reserve’s monetary policy outlook. US Treasury yields climbed to their highest level since January 2025 as rising Middle East tensions stoked inflation concerns, boosting expectations for a near-term Fed rate hike. Last week at the Jackson Hole symposium, Fed Chair Kevin Warsh said the central bank would “have work to do” if policymakers were not confident inflation was returning to its 2% target.
Markets are currently pricing a 66% probability of a rate hike later this month, according to the CME FedWatch Tool. Attention now turns to the ADP employment report due on Wednesday and nonfarm payrolls on Friday for further clues on the Fed’s policy path.