Gold Steadies Near $4,140 an Ounce as Dollar, US Treasury Yields Strengthen

Gold was steady near $4,140 an ounce as investors weighed the impact of a stronger dollar and higher US Treasury yields on Federal Reserve monetary policy.

Bloomberg reported on October 6 that spot gold traded little changed at $4,139.06 an ounce as of 7:30 a.m. Singapore time.

The stronger dollar pressured gold prices. The euro weakened as turmoil in European bond markets deepened, leaving the dollar near its highest level of the year in the previous session. A stronger dollar typically makes gold, which is priced in the US currency, more expensive for buyers using other currencies.

Selling in the US Treasury market also continued, pushing long-term yields to their highest levels in decades. Data from the Institute for Supply Management showed cost pressures in the services sector rose last month to the highest level in more than four years, reviving inflation concerns.

Fed officials, however, have continued to signal that another immediate rate increase is less likely. Markets are pricing in about a 25% chance of a rate hike at this month's Federal Open Market Committee meeting.

Investors are also focused on minutes from the Fed's September FOMC meeting, due on October 7. The Fed raised its benchmark interest rate last month for the first time in three years. Higher rates can reduce the appeal of non-yielding gold relative to interest-bearing assets such as Treasuries.

Gold fell more than 6% last month amid concern over energy-driven inflation, the possibility of additional US rate hikes and dollar strength. It has dropped more than 20% since conflict between the US and Iran began in late February.

Silver was little changed at $61.05 an ounce. Platinum slipped slightly, while palladium edged higher.