Gold prices pulled back on Tuesday as higher U.S. Treasury yields and a wave of profit-taking halted the metal’s recent rally. Spot gold was down 0.7% at $4,203.55 per ounce by late morning trading, while U.S. gold futures for February delivery fell 0.9% to $4,234.40. The decline follows a strong two-week rebound from the $4,000 level to above $4,250, prompting some investors to lock in gains.
Analysts said the move lower comes ahead of key U.S. economic data releases, with markets closely tracking whether weakening growth may reinforce expectations for the Federal Reserve’s next monetary policy shift. Meanwhile, silver prices also eased after hitting a record high of $58.83 per ounce on Monday.
Why Gold Is Pulling Back
Rising Treasury yields were the main pressure on bullion, with the benchmark 10-year yield hovering near a two-week peak. Higher yields typically weigh on non-yielding assets like gold by increasing the opportunity cost of holding them.
Market participants also pointed to profit-taking after a rapid rally in recent weeks. Carlo Alberto De Casa, external analyst at Swissquote, said traders were “booking gains after prices climbed sharply from $4,000 to $4,250 over the past two weeks,” noting that short-term volatility remains elevated.
The broader macro backdrop remains mixed. U.S. manufacturing data contracted for a ninth consecutive month, reinforcing concerns about slowing activity. However, persistently firm yields suggest investors are not yet convinced the Federal Reserve will move quickly toward easing.
Silver’s pullback from an all-time high also contributed to a broader cooling across precious metals markets. As previously covered, silver has surged this year on tight supply, heavy industrial demand, and strong seasonal buying in Asia.
Market Outlook Ahead of Key U.S. Data
Traders are now focused on upcoming U.S. economic releases, which could influence rate expectations and guide precious metals markets into year-end. A weaker data print may revive expectations of an earlier Fed rate cut, which would typically support gold.
Despite the short-term pullback, analysts emphasize that structural drivers – central-bank buying, geopolitical uncertainty, and ongoing inflation concerns – remain supportive for the metal. Positioning data also shows investors have maintained sizable long exposure throughout the recent rally.
Silver’s trajectory will also be closely monitored. After hitting a record price, analysts expect heightened volatility as industrial buyers, traders, and ETF flows react to rapid price swings.
For gold, the next major test lies in whether it can hold the $4,200 level while awaiting fresh catalysts. Any renewed decline in yields or softer economic data could help stabilize the market.
