Gold prices moved lower on Tuesday, with spot bullion falling below $4,300 an ounce as the US dollar and Treasury yields rose ahead of the Federal Reserve’s monetary policy decision.
At 02:16 ET, spot gold fell 0.2% to $4,290.39 an ounce after declining more than 1% in the previous session. Gold futures were down 0.5% at $4,330.57.
Spot silver declined 0.2% to $63.12 an ounce, while platinum increased 0.2% to $1,769.49. The US Dollar Index gained 0.2% to 99.63.
Markets Price 92% Probability of Fed Rate Increase
Gold had fallen to a five-week low on Monday as investors assessed higher energy prices, Treasury yields and expectations for US monetary policy.
Financial markets were pricing in approximately a 92% probability of a Federal Reserve rate increase this week.
Higher interest rates can reduce the relative appeal of non-interest-bearing assets such as gold compared with yield-generating investments.
The benchmark 10-year US Treasury yield briefly reached 5% on Monday for the first time in almost three years. The move came as markets assessed inflation and increased government and corporate borrowing requirements.
Gold has declined more than 3% in September after trading above $4,600 an ounce in late August.
Oil Supply Disruptions Add to Inflation Focus
Oil prices have risen following the shutdown of Saudi Arabia’s East-West pipeline after attacks last week.
The pipeline had provided an alternative route for Saudi crude exports amid restrictions affecting shipping through the Strait of Hormuz.
Saudi Arabia has not specified how long the pipeline will remain offline or how quickly alternative shipments could replace the affected flows.
Higher energy costs have increased market attention on their potential impact on inflation and Federal Reserve policy.
OCBC Raises Gold and Silver Forecasts
OCBC has increased its precious-metals price forecasts, citing higher starting prices, increased investment participation and structural demand.
Chez Anbu, head of wealth advisory at OCBC, said gold’s recovery in August reversed some of the declines recorded earlier as the macroeconomic environment changed.
OCBC now forecasts gold at $4,600 an ounce by December 2026 and has set a silver forecast of $69.70 an ounce.
Gold remained above the approximately $4,000 level reached during an earlier correction.