By Brijesh Patel
Oct 11 (Archyde.com) – Gold prices fell on Tuesday on the strength of the dollar and rising Treasury yields, as investors remained on the sidelines awaiting U.S. inflation data from this week, which would offer more clarity on the path of rising interest rates in the country.
* Spot gold was down 0.2% at $1,664.13 per ounce by 0927 GMT, having hit its lowest since Oct. 3. US gold futures fell 0.2% to $1,672.50.
“It’s hard to make a bullish case for gold” considering peak inflation may be yet to come and rate hikes are likely to continue until then, said Craig Erlam, senior market analyst at OANDA.
* “It’s just not the ideal environment for gold. We’re seeing a rally in the dollar and in yields, and gold has been punished for it.”
* Although gold is seen as a hedge once morest inflation and economic uncertainties, higher rates reduce the attractiveness of bullion, which does not earn interest.
* The dollar index hit a nearly two-week high, making gold more expensive for buyers holding other currencies. The 10-year US Treasury bond yield was trading just below 4%.
* Following stronger-than-expected US employment data, attention turns to Thursday’s inflation reading, which is expected to remain high and reinforce the Fed’s rhetoric.
* Gold has lost nearly 20% since breaking above the $2,000 mark in March. The safe haven has not shone despite the geopolitical uncertainty and the recent drop in stock markets, as most investors have sought refuge in the dollar.
* Among other precious metals, silver fell 1.6% to $19.33 per ounce, platinum fell 1.1% to $888.73 and palladium rose 0.7% to $2,187.01. Dollars.
(Reporting by Brijesh Patel in Bengaluru; Editing in Spanish by Ricardo Figueroa)