Gold prices remained largely flat, trading near their lowest levels in a month, as the U.S. dollar gained strength amid expectations of prolonged higher interest rates.
Spot gold remained steady at $1,900.49 per ounce as of 0119 GMT, hovering close to its lowest level since August 23, which it touched on the previous day. U.S. gold futures saw a 0.1% decline to $1,918.20.
The U.S. dollar held near a 10-month high against major currencies, supported by elevated Treasury yields and the prospect of extended higher interest rates.
Minneapolis Federal Reserve Bank President Neel Kashkari stated that there is a 40% chance the Fed will need to significantly raise interest rates to combat inflation.
Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, which is priced in U.S. dollars.
U.S. consumer confidence fell to a four-month low in September, impacted by concerns about rising prices and fears of a potential recession. However, households remained generally optimistic about the labor market.
Attention in the market is now turning to the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, which is scheduled for release on Friday.
In other economic developments, the U.S. Senate advanced a bipartisan bill aimed at preventing a government shutdown, while the House pushed for a competing measure supported solely by Republicans.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, reported a 0.4% decrease in its holdings on Tuesday.
China’s gold imports via Hong Kong rebounded in August compared to the previous month, with the issuance of new quotas to local banks expected to boost shipments into the world’s top gold consumer.
Spot silver dipped by 0.6% to $22.72 per ounce, platinum lost 0.2% to reach $901.95, and palladium gained 0.2% to reach $1,226.32.
Upcoming data/events include the release of France’s Unemployment Class-A SA data for August at 1000 GMT and the U.S. Durable Goods data for August at 1230 GMT.
