Gold wavered as oil again climbed above US$100 a barrel and a rise in government bond yields gathered pace. Bullion fluctuated in a range around US$4,170 an ounce. Long-dated government bond yields hit fresh multi-decade highs, with the 10-year Treasury rate reaching its highest since 2002. Higher yields typically weigh on gold , as it doesn’t pay interest. Oil prices jumped back into triple digits, as the Middle East war continued to crimp fuel supplies. Gold has been sensitive to those moves in recent months, as higher energy prices trickle through into inflation indicators and maintain pressure on the Federal Reserve to tighten policy. Still, the Fed’s preferred measure of underlying inflation — the personal consumption expenditure price index excluding food and energy — rose by a slightly less-than-expected 0.2 per cent in August. Traders now see a 37 per cent chance of an October rate hike, down from about 70 per cent earlier in the week. Gold fell six per cent in September, its worst monthly loss since June, after the Fed hiked rates for the first time since 2023 and signalled that further tightening may be needed. Even so, holdings in bullion-backed exchange-traded funds have continued to increase, adding more than 60 tons in September. “Geopolitical uncertainty, particularly around the stalled United States-Iran ceasefire discussions, continues to provide a safe-haven underpinning, while higher oil prices remain an inflation risk,” said Manav Modi, commodity analyst Motilal Oswal Financial Services Ltd. 10 reasons investors are driving U.S. government bond yields higherCanadian confidence stuck in neutral as oil fuels inflation fears Traders will be watching Friday’s U.S. jobs report for the next clues on the Fed’s rate outlook. Spot gold was little-changed at US$4,163.30 an ounce at 11:28 a.m. in New York. Silver rose 0.4 per cent to US$60.69 an ounce. Platinum and palladium fell. The Bloomberg Dollar Spot Index, a gauge of the U.S. currency, rose 0.4 per cent. —With assistance from Martin Ritchie. Bloomberg.com
Gold wavers as traders weigh higher bond yields, oil at US$100
