Gold prices fell on Tuesday under pressure from higher U.S. Treasury yields and a stronger dollar, as investors awaited comments from Federal Reserve Chairman Jerome Powell for further clues on the path of interest rates.
Spot gold was down 0.3% at $2,325.3 per ounce by 0952 GMT.
The benchmark 10-year Treasury yield hit a one-month high on Monday and remained elevated on Tuesday, making non-yielding gold less attractive amid bets on the possibility of a second Donald Trump presidency.
Gold is down 5% from an all-time high of $2,449.89 an ounce hit May 20, a rally driven by safe-haven demand driven by geopolitical and economic uncertainty, as well as persistent central bank buying, a key category of demand.
“We see no material change in the rationale for holding precious metals and, with the prospect of US rate cuts in the second half inviting ETF investors back, a group of net sellers since 2022, we see higher prices at year-end,” Saxo Bank said in a note.
Saxo Bank expects gold and silver to hit $2,500 and $35 an ounce, respectively, by the end of 2024. Global physically backed gold exchange-traded funds (ETFs) saw their first inflows in a year in May.
However, there are signs that central banks are slowing down their gold purchases due to this year’s high prices, even though their demand remains above the pre-2022 level.
Central banks reported about 10 metric tons of net gold purchases in May, 56% less than the previous month. Gross monthly purchases fell to about 23 metric tons and were offset by gross sales of about 12 metric tons, according to the World Gold Council.
Central banks in Poland, Turkey and India were the largest buyers in May, while Kazakhstan sold 11 tonnes.
Spot silver fell 0.5% to $29.31, platinum added 0.8% to $985.70 and palladium rose 1.6% to $986.75.
