Gold prices remained under pressure on Tuesday as rising Treasury yields and expectations of a US interest-rate increase outweighed safe-haven demand generated by escalating Middle East tensions.
Spot gold was trading around $4,287 an ounce, down roughly 0.6% in the session after touching its lowest level since early August earlier in the day. Silver was broadly flat around $63.65 an ounce.
The main pressure came from rates, ast traders are pricing in about a 92% chance that the Federal Reserve will raise rates by 25 basis points on Wednesday, while benchmark 10-year Treasury yields have climbed to their highest levels since 2007.
A stronger dollar has added to the headwind for bullion, which offers no yield and typically becomes less attractive as borrowing costs rise.
Oil's renewed surge has reinforced that argument. Brent remains above $100 a barrel following attacks on Saudi Arabia's East-West pipeline and continued disruption around the Strait of Hormuz, keeping inflation risks elevated even as geopolitical uncertainty would normally support gold.
Weak US manufacturing data did little to change the picture, given that the New York Fed's Empire State Manufacturing Survey fell to 7.6 in September from 20.6 in August, well below forecasts of 14.8, but gold struggled to attract a sustained bid.
Market watchers reckon the yellow metal - and those producing it - contend with higher oil prices, rate-hike expectations, a stronger dollar and rising long-term bond yields.
