Gold ticks up on easing Treasury yields, but rate outlook weighs
NEW YORK: Gold prices edged higher on Tuesday as US Treasury yields eased, although expectations of higher interest rates limited gains.
Gold prices saw a slight increase on Tuesday as US Treasury yields decreased, despite concerns about potential interest rate hikes. The spot price of gold rose 0.3 percent to US$4,357.31 per ounce, with US gold futures for December delivery up 0.3 percent to US$4,395.00. Traditionally seen as a hedge against inflation and geopolitical risks, gold's appeal diminishes in a high-interest-rate environment, as investors tend to favor assets that offer yields.
The Federal Reserve raised its policy rate by 0.25 percent last week, and signaled further hikes are likely to combat inflation stemming from strong demand and a broader commodity price shock. St. Louis Fed President Alberto Musalem stated that earlier action from the central bank would be preferable to waiting. Geopolitical tensions in Yemen also impacted market sentiment, with Houthi fighters advancing to seize strategic positions and block the Red Sea coast from Saudi-backed forces.
Meanwhile, US President Donald Trump was set to attend the United Nations General Assembly and meet with Chinese President Xi Jinping. Silver, platinum, and palladium also saw modest gains in the precious metals market.
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