Gold Futures Settle Modestly Higher As Dollar, Bond Yields Drop

Gold prices recovered from early losses and moved higher on Tuesday as the dollar retreated and bond yields dropped amid some hopes the Federal Reserve might slow down the pace of its monetary tightening at its upcoming meetings.

The Fed is widely expected to raise interest rates by another 75 basis points next week, although CME Group’s FedWatch Tool shows the chances for a 50 or 75 basis point rate hike in December are split roughly fifty-fifty.

A recent report from the Wall Street Journal suggested some Fed officials are growing uneasy about the impact the aggressive rate hikes are having on the economy.

The dollar index, which dropped to 110.76, recovered some ground subsequently and was last seen at 110.99, down nearly 0.9% from the previous close.

The yield on the benchmark ten-year note showed a steep drop after ending the previous session at a fourteen-year closing high.

The pullback by treasury yields comes as traders continue to express optimism the Federal Reserve will signal a slower pace of interest rate hikes following its meeting next week.

Gold futures for December ended higher by $3.90 or about 0.2% at $1,658.00 an ounce, after having declined to $1,641.20 earlier in the day.

Silver futures for December ended up $0.160 at $19.349 an ounce, while Copper futures for December settled at $3.3970 per pound, down $0.0335 from the previous close.

In U.S. economic news today, a report released by the Conference Board showed U.S. consumer confidence pulled back by much more than expected in the month of October.

The Conference Board said its consumer confidence index slumped to 102.5 in October from a revised 107.8 in September. Economists had expected the index to dip to 106.0 from the 108.0 originally reported for the previous month.

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