Spot gold climbed 0.3 percent to $4,152.04 per ounce by 0909 GMT on Tuesday, as a sharp repricing of October rate-hike odds—now at just 21 percent according to CME's FedWatch Tool—offset headwinds from a firm dollar and fresh 24-year highs in Treasury yields.
The repricing reflects softer-than-expected September job growth and downward revisions to payrolls data for the two preceding months. Yet markets still price nearly 70 percent odds for a December rate increase, a dynamic that continues to pressure gold: higher real yields widen the opportunity cost of holding non-yielding assets.
US 10-year and 30-year Treasury yields reached fresh 24-year highs on Monday, reflecting sustained demand for higher returns. The dollar held its Monday gains, making dollar-denominated commodities more expensive for international buyers—a headwind that has offset the benefit of lower near-term rate-hike expectations.
December gold futures rose 0.56 percent to $4,180 per ounce.
Ole Hansen, head of commodity strategy at Saxo Bank, said gold trades near key support just above $4,100, with macroeconomic headwinds from rising real yields and dollar strength continuing to weigh on investor appetite. With limited U.S. economic data scheduled this week, Hansen noted that market focus will likely remain on the dollar, Treasury yields, and fiscal pressures in the euro zone.
Sovereign bond yields have pushed higher across the euro zone on concerns over rising government debt and widening budget deficits, particularly in France, adding to persistent global fixed-income market pressures.
Silver remained flat at $61.10 per ounce. Platinum eased 0.6 percent to $1,710.71, and palladium fell 1 percent to $1,160.66.
