Gold prices fell more than 1% on Tuesday to around $4,375 an ounce, their lowest level since August 19, as elevated US Treasury yields pressured the non-yielding metal. Traders are also awaiting key US labor market data for fresh signals on the Federal Reserve’s monetary policy outlook.
US Treasury yields climbed to their highest levels since January 2025, as escalating tensions in the Middle East fueled inflation concerns and strengthened expectations of a near-term Fed rate hike. At the Jackson Hole symposium last week, Fed Chair Kevin Warsh warned that the central bank would “have work to do” if policymakers were not confident that inflation was returning to its 2% target.
According to the CME FedWatch Tool, markets are now pricing in a 66% probability of a rate increase later this month. Investor focus is turning to the ADP employment report due Wednesday and the nonfarm payrolls data on Friday for further guidance on the Fed’s policy trajectory.
