Gold Prices Stifled by Heavy Economic Burdens, Making Gains Difficult
Gold prices have weakened once again. The strengthening of the US dollar and high US Treasury yields are hindering gold’s ascent, even as expectations for a Federal Reserve interest rate hike in October begin to subside.
According to Refinitiv, gold prices in Monday’s (5/10/2026) trading stood at US$4,139.49 per troy ounce, representing a decline of 0.07%. Yesterday’s closing price was the lowest since 28 September 2026. This decline extends gold’s recent struggles, with prices falling by 0.92% over the last two days.
Gold prices continued to decline today. On Tuesday (6/10/2026) at 06:57 WIB, prices fell by 0.11% to US$4,135.08 per troy ounce.
Forex.com analyst Fawad Razaqzada stated that gold still has the potential for short-term correction before being pursued by investors again. The strengthening US dollar and high bond yields are the primary factors weighing on gold prices.
“We may see a decline in gold prices in the short term before buyers return significantly. It all relates to the strengthening US dollar and high bond yields,” said Fawdo Razaqzada, as quoted by Refinitiv.
“In recent days, the US economic data we have seen has largely been below expectations. This has led the market to reduce bets on interest rate hikes,” he added.
The US dollar index strengthened, making gold, which is priced in dollars, more expensive for holders of other currencies. Simultaneously, the 10-year US Treasury yield is near its highest level in almost two decades.
Expectations for a Fed rate hike in October have also decreased after US job growth slowed more than expected in September. Employment data from two months prior was also revised downwards.
Market participants now estimate the probability of the Fed raising interest rates in October at only 22%, down from approximately 70% a week earlier. However, the probability of a hike in December remains at 84%, according to the CME FedWatch Tool.
Higher interest rates typically pressure gold because the precious metal provides no yield. However, gold remains a hedge against inflation and economic uncertainty.
Investors are now awaiting the release of the Fed’s September meeting minutes on Wednesday (7/10/2026). The document could provide clues regarding the future direction of US monetary policy.
Meanwhile, Metals Focus predicts that gold prices will hit new records in 2027, as investors seek alternatives to traditional US dollar-based assets. Gold prices are expected to average US$5,330 per troy ounce next year.
In other precious metals markets, silver prices rose 1.2% to US$61.09 per troy ounce, platinum strengthened by 1.4% to US$1,722.15, and palladium increased by 0.7% to US$1,176.33.