Gold prices retreated during the North American trading session on Thursday after hitting an all-time high of $4,058, falling below $4,000 as the dollar made strong gains. The gold/USD pair is trading at $3,978, down 1.5%.

Safe-haven demand dwindles amid hopes of a ceasefire between Israel and Hamas.

A negative mood prevailed in the gold market on Thursday. Bullion prices fell as traders booked profits, pushing prices towards a daily low of $3,944 as Chinese traders returned from their holidays. Optimistic news regarding a permanent ceasefire between Israel and Hamas boosted investor sentiment in the market.

Despite the White House's efforts, the war between Russia and Ukraine continues.

Nevertheless, gold is expected to continue rising as the US government shutdown continues into its ninth day, while the latest Federal Reserve meeting minutes showed that policymakers agreed to support the weak labor market.

Federal Reserve Governor Michael Barr stated that he does not believe there will be a general impact of tariffs on services inflation. He added that uncertainty surrounding inflation and the labor market warrants a cautious approach to further interest rate cuts.

Neel Kashkari, a member of the Minneapolis Federal Reserve, said he "basically agrees" with everything Barr said.

 

Daily Market Movers: Gold Declines Amid Rising US Treasury Yields

• Gold is under pressure as the US dollar strengthens. The US Dollar Index (DXY), which measures the dollar's performance against a basket of six major currencies, rose 0.62% to 99.42.
• US Treasury yields rose, with the 10-year Treasury yield rising two basis points to 4.148%. US real yields, which are inversely correlated with gold prices, also rose to 1.798%.
• Additional comments from Federal Reserve Governor Michael Barr revealed that current monetary policy is appropriate and interest rates are moderately tight. He believes the Fed's inflation target faces significant risks, adding that two more years would be a long time for consumers to wait for 2% inflation.
• Regarding economic growth, he added that the economy remains resilient, with strong consumer spending indicating that US GDP will remain strong in the third quarter of 2025.
• Goldman Sachs revised its 2026 gold price forecast from $4,300 to $4,900, citing strong inflows into gold ETFs and demand from central banks.
• Financial markets are indicating that the Federal Reserve will cut interest rates by 25 basis points at its next meeting on October 29. The probability of this is 94%, according to the Prime Market Terminal interest rate probability tool.