- Fundamentals remain supportive of gold, analyst says
- Yemeni government forces drive Houthis from Bab el-Mandeb Strait
Oct 6 (Reuters) - Gold prices eased on Tuesday, pressured by a firmer US dollar and elevated Treasury yields, although losses were limited by easing expectations of a Federal Reserve interest rate hike this month.
Spot gold slipped 0.3% to $4,127.87 per ounce by 0620 GMT. US gold futures were little changed at $4,155.30.
The dollar held firm, making greenback-denominated commodities more expensive for holders of other currencies.
The 10- and 30-year Treasury yields hit 24-year highs on Monday as negative sentiment in the bond market prevailed.
"Fundamentals remain supportive of gold in the long term. The next big catalyst is likely to stem from geopolitical risk in the Middle East," said Kyle Rodda, senior financial market analyst at Capital.com.
"Alternatively, a significant change in US rate expectations could provide an impetus for the next break-out, so every piece of price data will be important."
Expectations of a US rate hike in October eased after data on Friday showed US job growth slowed more than expected in September and nonfarm payrolls for the prior two months were revised lower.
Traders are still pricing an 87% probability of an increase in December, according to CME's FedWatch Tool.
Higher interest rates increase the opportunity cost of holding non-yielding gold.
Data showed US services sector activity slowed in September, while strong domestic demand stretched supply chains and pushed a measure of prices paid by businesses for inputs to its highest level in more than four years, suggesting inflation could remain elevated into 2027.
Elsewhere, Saudi-backed Yemeni government forces staged a lightning advance to retake the coast around the Bab el-Mandeb Strait up to the city of Mocha, the government said, pushing the Iran-backed Houthis out of most of the areas they seized last month.
Among other metals, spot silver fell 0.7% to $60.64, platinum also lost 0.7% to $1,709.75 and palladium eased 0.7% to $1,164.24.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu
Source: Reuters