IGI Logo

Gold prices extended their falls to a fifth session on Tuesday, pressured by gains in the U.S. dollar and Treasury yields, while caution also set in ahead of inflation data due later this week.

Spot gold was down 0.2% at $1,664.92 per ounce, as of 0347 GMT, after hitting its lowest level since Oct. 3 earlier in the session. U.S. gold futures dipped 0.1% to $1,673.00 per ounce.

Benchmark U.S. 10-year Treasury yields were just shy of 4%, while the dollar index rose 0.3%, making the greenback-priced gold more expensive for buyers holding other currencies. [US/] [USD/]

"It's a technical level for bond yields and they're dragging the dollar higher and weighing on gold prices," said City Index analyst Matt Simpson, adding that signals of a global recession from the International Monetary Fund were also driving safe-haven flows into the dollar.

"Gold is now stuck in the $1,658 to $1,676 range," said Simpson.

After stronger-than-expected U.S. labour data, market focus is now on Thursday's inflation reading, which is expected to remain stubbornly high and reinforce the Federal Reserve's hawkish rhetoric.

While gold is considered a hedge against inflation and economic uncertainties, rising interest rates reduce the non-yielding metal's appeal.

If the U.S. economy, which is still quite resilient, starts softening, gold could see interest, but there have to be definitive signs that the Fed is willing to take its foot off the rate-hike pedal and inflation tapering, said Stephen Innes, managing partner at SPI Asset Management.

Spot silver fell 1% to $19.46 per ounce, platinum dipped 0.5% to $894.00 and palladium rose 0.5% to $2,182.94.