Gold Falls 1% as Investors Book Profits, Treasury Yields Rise

03/12/2025 05:28 AST

Gold prices fell 1% on Tuesday, pressured by rising US Treasury yields and profit-booking following a six-week high hit in the prior session, while silver pulled back from its record high hit the previous day.

Spot gold lost 0.7% to $4,204.50 per ounce by 1215 GMT, after falling over 1% earlier in the session.

US gold futures for February delivery were down 0.9% at $4,235.50 per ounce.

"The combination of a stronger dollar, higher Treasury yields and profit-taking have conspired to take some shine off of gold," said independent analyst Ross Norman, Reuters reported.

The US dollar rebounded after hitting a two-week low in the previous session. Meanwhile, benchmark 10-year US Treasury yields hit a near a two-week high, following weakness in Japanese and European government bonds, reducing the appeal of non-yielding bullion.

Data on Monday showed US manufacturing contracted for the ninth straight month in November. Investors are now looking out for Wednesday's November ADP employment report and Friday's delayed September PCE Index, for clues on a Fed interest rate cut at the central bank's meeting next week.

Traders are pricing in an 87% chance of a December Fed rate cut, according to CME's FedWatch tool.

Lower interest rates typically benefit non-yielding gold.

"I expect gold to consolidate laterally between $4,000 and $4,400 in the next few weeks," said Carlo Alberto De Casa, external analyst at banking group Swissquote.

Silver pulled back from Monday's record high of $58.83 per ounce, easing 0.9% to $57.42 per ounce.

"With a dramatic move that we saw to threshold highs, it's not unusual seeing a bit of profit-taking off the top," said Norman.

Silver is up 98% this year, supported by gold's bull run, a persistent supply deficit, and its inclusion on a draft list of US critical minerals.

Platinum slipped 2.1% to $1,622.56, and palladium was up 1.3% at $1,442.22.