The price of gold fell by about 0.4%, which was caused by an increase in US Treasury yields and partial profit-taking ahead of the publication of a variety of statistical data that will provide clues about the trajectory of the Fed's interest rate.
The yield on 10-year US Treasury bonds rose by 3.2 basis points to 4.264% (the highest value since July 25. Since the beginning of October, bond yields have increased by more than 40 basis points in anticipation of policies that could delay interest rate cuts.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) consolidated, but jumped 3.43% since the beginning of October (the largest increase since April 2022), making gold less attractive for buyers holding other currencies.
Regarding the U.S. data, the ADP employment, U.S. Personal Consumption Expenditures (PCE) numbers and payrolls report will be presented later this week. Experts said that prospects of lower U.S. interest rates have room to support further investment demand and lift gold prices. According to the CME FedWatch Tool, markets see a 98.3% probability of a 0.25% rate cut at the November meeting (compared to 86.5% a week earlier) and a 70.8% probability of a 0.25% rate cut in December (compared to 64.9% a week earlier). The uncertain situation around the US presidential election also supports the precious metal. The upcoming elections will be more dynamic and unpredictable than many previous ones, and such volatility creates additional interest in gold.