Gold prices eased in Asian trading on Tuesday as a rebound in U.S. Treasury yields pressured the metal. Investors also stayed cautious ahead of several key economic reports and the Federal Reserve’s highly anticipated policy decision.
Spot gold slipped 0.4% to $4,213.97 per ounce as of 02:41 ET (06:41 GMT), retreating after reaching a six-week high in the prior session. U.S. gold futures dropped 0.7% to $4,245.55.
Gold pulls back as Treasury yields climb
The decline followed a rise in benchmark 10-year Treasury yields, which hovered near a two-week high. Higher yields reduced demand for non-interest-bearing bullion and softened some of the optimism built on expectations of a near-term Fed rate cut.
Despite the pullback, overall sentiment toward gold remained relatively constructive. Market pricing still indicates strong expectations that the Fed may cut rates next week, supported by easing inflation trends and signs of weakening labor conditions.
A rate cut typically benefits gold by lowering the opportunity cost of holding the metal.
Still, traders avoided taking major positions ahead of important economic releases. This week’s data includes the November ADP private-sector employment report and the delayed September Personal Consumption Expenditures (PCE) Price Index — the Fed’s preferred inflation indicator — both of which could significantly influence views on future policy easing.
Gold markets were also reacting to uncertainty surrounding future Federal Reserve leadership. U.S. President Donald Trump said on Sunday that he has selected a nominee to replace Fed Chair Jerome Powell, though he did not reveal the choice. Some reports point to White House economic adviser Kevin Hassett as a leading contender.
Other metals weaken ahead of Fed decision
Precious and industrial metals also moved lower on Tuesday as investors pared risk before the Fed’s announcement.
Silver futures dropped 2.1% to $57.88 per ounce after hitting a record high of $59.44 on Monday. Platinum futures fell 0.6% to $1,661.60 per ounce.
On the London Metal Exchange, benchmark copper futures slipped 0.3% to $11,228.20 per ton, while U.S. copper futures were steady at $5.27 per pound.
