Gold prices remained under pressure on Thursday, September 24, as rising U.S. Treasury yields, a stronger dollar and expectations of further Federal Reserve monetary tightening reduced demand for the precious metal. Spot gold was around $4,268.90 per ounce in early New York trading, down about 0.4%, after touching a near one-week low as investors reassessed the outlook for U.S. interest rates. The pressure intensified after the benchmark 10-year Treasury yield climbed to its highest level since 2007, increasing the opportunity cost of holding gold, which does not generate interest income. Markets were also pricing approximately a 69% chance of another Federal Reserve rate increase in October, according to Reuters, as policymakers continued to confront persistent inflation pressures. Gold had already fallen more than 1% during Wednesday's session as hawkish signals from Fed officials pushed the dollar toward a two-month high, making dollar-denominated bullion more expensive for buyers using other currencies. Despite the short-term weakness, gold remains sensitive to several competing forces, including geopolitical uncertainty, inflation expectations, energy prices, central-bank policy and safe-haven demand. Investors will therefore closely monitor upcoming U.S. economic indicators and Federal Reserve commentary for clues about the next move in interest rates, while changes in Treasury yields and the dollar are likely to remain important drivers of bullion prices.
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