Gold prices fell on Tuesday as the dollar advanced after an overnight climb in U.S. Treasury yields.
Signs of an ease off in geopolitical tensions also weighed on bullion after Israel said it would consider “tactical little pauses” in fighting to allow the entry of aid or the exit of hostages from the Gaza Strip.
Spot gold dipped half a percent to $1,967.83 per ounce, while U.S. gold futures were down 0.8 percent at $1,973.45.
U.S. Treasury yields steadied after rising across the curve on Monday as a result of a heavy slate of corporate debt sales and a series of auctions beginning today.
Fed rate worries returned to the fore after Minneapolis Fed President Neel Kashkari told Wall Street Journal that he would err on the side of overtightening monetary policy rather than not doing enough to bring inflation down to the 2 percent target.
U.S. reports on the U.S trade deficit in the month of September may attract attention later today along with remarks by several Fed officials.
As recession worries swirl, Fed Chair Jerome Powell’s speech due on Wednesday and Thursday may offer additional clarity on the U.S. rate outlook.