Gold prices drifted lower on Tuesday and the most active gold futures contracts fell to a seven-week low, as a strong dollar and rising Treasury yields weighed on the safe-haven metal.
The yield on U.S. 10-year Treasury note rose to above 1.5%, a three-month high, amid rising prospects of the Fed tapering its bond-buying program in the foreseeable future.
The dollar index rose to 93.81, gaining nearly 0.5%.
Gold futures for December ended down by $14.50 or about 0.8% at $1,737.50 an ounce, the lowest settlement since August 10.
Silver futures for December ended lower by $0.227 at $22.467 an ounce, while Copper futures for December settled at $4.2465 per pound, down $0.0430 from the previous session.
Federal Reserve Chair Jerome Powell warned members of the Senate Banking Committee about upside risks to inflation during testimony this morning.
In prepared remarks, Powell predicted inflation will remain elevated in the coming months before moderating.
“As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors,” Powell said.
“If sustained higher inflation were to become a serious concern, we would certainly respond and use our tools to ensure that inflation runs at levels that are consistent with our goal,” the Fed chief added.
Meanwhile, a report released by the Conference Board showed a continued deterioration in U.S. consumer confidence in the month of September.
The Conference Board said its consumer confidence index tumbled to 109.3 in September from an upwardly revised 115.2 in August.
The decrease surprised economists, who had expected the index to inch up to 114.8 from the 113.8 originally reported for the previous month.