Gold prices moved slightly lower on Tuesday after rising earlier in the session, as a weaker U.S. dollar provided some support while investors assessed expectations for a Federal Reserve interest-rate increase and upcoming U.S. inflation data.
At 03:15 ET (07:15 GMT), XAU/USD was down 0.1% at $4,402.49 an ounce, while Gold Futures declined 0.7% to $4,447.11. Silver, measured by XAG/USD, rose 0.2% to $66.32 an ounce, while XPT/USD platinum gained 0.3% to $1,828.78.
The U.S. Dollar Index was marginally lower at 98.90.
Yen Gains Weigh on Dollar
The Japanese yen extended its recent advance against the dollar, approaching its strongest level of the year as traders increased expectations that the Bank of Japan could raise interest rates.
The resulting weakness in the dollar provided some support for gold. Because bullion is priced in dollars, movements in the U.S. currency can affect its cost for buyers using other currencies.
Gold had fallen in the previous week and has since traded mostly around $4,400 an ounce. The metal has remained within a relatively narrow range following its recovery from levels near $4,000 in July.
Oil prices were another factor under consideration, with Brent crude approaching $100 a barrel amid renewed tensions between the United States and Iran and concerns about disruption around the Strait of Hormuz. Higher energy prices can contribute to broader inflationary pressures.
Fed Expectations and U.S. Inflation Data in Focus
Markets were pricing an approximately 60% probability of a Federal Reserve interest-rate increase next week following the stronger-than-expected U.S. nonfarm payrolls report released last week.
Investors are now awaiting U.S. consumer price data later this week for further information on the inflation outlook and its potential implications for monetary policy.
Tony Sycamore, senior market analyst at IG, said gold ended the previous session lower at around $4,406, with the stronger employment report and higher energy prices contributing to the move.
Sycamore expects those factors to put upward pressure on U.S. Treasury yields when markets reopen, which could weigh on gold prices.
People’s Bank of China Increases Gold Purchases
Central-bank demand from China also remained a factor in the gold market.
The People’s Bank of China accelerated its gold purchases in August to the highest monthly level since 2023, according to the supplied information, despite higher bullion prices.
Gold markets are now assessing the interaction between currency movements, Treasury yields, energy prices and forthcoming U.S. inflation data as investors consider the outlook for Federal Reserve policy.