Gold drops as US bond yields rise

Gold alloys

Gold prices declined on Monday as the US 10-year bond rate rose despite increased market expectations that the Federal Reserve will hold interest rates unchanged in its next meeting.

Gold futures for December traded 0.25% lower at $1,994.20 per ounce at 12:11 pm KSA time.

Spot prices edged down 0.31% to $1,986.44 per ounce. Silver contracts for December delivery were steady at $23.28. Spot platinum prices declined 0.21% to $932.80 per ounce.

“The major factor that will influence gold in the near-term will be the U.S. 10-year Treasury yields ... if you start to see resurgence in yields, gold could break below the key support level around $1,974,” said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.

The US 10-year bond rate rose by 3.5 basis points (bps) to 4.539%, while the 30-year bond rate added 2.1 bps to 4.773%.