Gold is losing some luster ahead of Powell’s speech

Gold prices fell on Tuesday as the dollar and US Treasury yields rose ahead of economic data and a speech by Federal Reserve Chairman Jerome Powell this week, which could shift the direction of upcoming interest rate decisions.

Spot gold prices fell 0.1 percent to $1,916.88 per ounce by 0703 GMT. US gold futures prices also fell 0.2 percent to $1,930.00.

US Treasury bond yields rose to their highest level in more than a week, and the dollar also rose, making non-yielding bullion more expensive for holders of other currencies, ahead of the release of data on retail sales and industrial production in the United States later on Tuesday.

Markets are speculating that Powell’s planned speech on Thursday could provide more clarity on the central bank’s stance on interest rates after more dovish gestures from top monetary policy officials in the past few weeks.

Higher interest rates would also increase the opportunity cost of holding gold.

Tensions in the Middle East, which pushed safe-haven gold prices to the highest level in more than three weeks on Friday, also exacerbated market uncertainty.

As for other precious metals, silver fell in spot transactions by 0.3 percent to $22.53 per ounce, platinum by 0.2 percent to $889.06, and palladium by 0.4 percent to $1,138.92.