Gold prices fell more than 1% on Sept 1 to their lowest level in nearly two weeks as rising US Treasury yields and growing expectations of a Federal Reserve (Fed) rate hike reduced demand for the non-yielding metal.
According to Reuters, spot gold dropped 1.2% to US$4,393.89 an ounce by 0823 GMT, its weakest since Aug 19, while US gold futures slipped 0.9% to US$4,443.10.
The decline came as benchmark 10-year US Treasury yields climbed to their highest level since January 2025, driven by renewed Middle East tensions and concerns that higher energy prices could fuel inflation.
Gold had reached a more than three-month high last week before tumbling over 3% on Aug 28 following Fed Chair Kevin Warsh’s hawkish Jackson Hole remarks. Traders are now pricing in a 66% probability of a rate hike later this month, according to CME FedWatch.
Investors will turn to Sept 2’s ADP employment report and Sept 4’s US nonfarm payrolls for further clues on the Fed’s policy path.
Geopolitical tensions remained elevated after US President Donald Trump threatened further strikes against Iran, although the traditional safe-haven support was outweighed by higher yields and tighter monetary policy expectations.
Elsewhere, silver fell 1.2% to US$65.72 an ounce, platinum eased 0.1% to US$1,788.35 and palladium declined 1.5% to US$1,334.52.
