Gold Price News: Gold Falls to Two-Week Low

Gold prices fell on Tuesday, coming under pressure from a recent strengthening of the US dollar and news that China’s central bank had bought no further gold in September.

Prices eased as low as $2,606 an ounce on Tuesday, down from around $2,645 an ounce in late trades on Monday. The market had looked fairly well supported through the morning session in Europe, but prices came under selling pressure by mid-afternoon.

The US dollar has rallied against other major currencies in the first few days of October, and continued to hold its ground this week. This creates a bearish element for dollar-denominated gold prices as it makes the precious metal more expensive for buyers in other currencies, denting demand.

In addition, the gold market appeared to take a dim view of the latest update from China’s central bank, which again made no additions to its official gold holdings in September for the fifth month in a row, according to news reports on Tuesday. Since central bank buying has been a major support for gold prices earlier in 2024, a lack of buying by China is a negative factor for prices. This can also be taken as a sign that even the major central banks may have a degree of price sensitivity in their strategic purchasing – part of efforts to diversify reserves away from fiat currencies.

Despite the modest pull-back, expectations of lower interest rates and ongoing geopolitical tensions suggest the backdrop for gold is likely to remain supportive over the long term.

Looking ahead, the markets will be watching out for several speeches by US Fed officials on Wednesday, followed by Thursday’s US inflation rate for September and weekly initial jobless claims figures, all of which may offer further clues on the outlook for monetary policy in the coming months.