Gold slipped on Tuesday as a firmer dollar and rising Treasury yields pressured the metal ahead of the Federal Reserve's June meeting minutes. Spot gold fell about 1% while traders weighed whether the Fed will raise rates later this year.
Gold pulled back roughly 1% to just over $1,124 an ounce in early U.S. trading on Tuesday, with futures tracking the same slide. Traders eased out of the metal as they waited for detailed minutes from the Federal Reserve's June policy meeting.
A stronger dollar drove much of the move. Higher Treasury yields, led by the 10-year note climbing to a two-week peak, lifted the greenback and made gold costlier for buyers holding other currencies. Because gold pays no income, its appeal fades when yields rise, so demand can wane as rates climb.
Fed minutes hold the market's focus
A quiet day for U.S. economic data left investors fixed on the minutes, which should clarify the central bank's thinking on future interest rate moves. The Fed held rates steady last month at 3.5-3.75%, yet its projections through the summer hint at possible hikes later this year.
New Fed Chair Kevin Warsh has said he prefers to avoid giving rate guidance, even after acknowledging last week that inflation risks may be easing. That stance adds ambiguity to how the market reads policy.
Rate-hike odds slip after jobs data
Outside the Fed, oil prices have retreated slightly after a temporary ceasefire between the U.S. and Iran, while last week's labor data came in softer than hoped, which complicated the rate outlook. Following that jobs report, the CME FedWatch Tool put September rate-hike odds at roughly 56%, down from 60%. That narrow shift underscores the uncertainty still surrounding the decision.
Source: StockInvest.us
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