Gold Price Slides to Two-Month Low as Strong Dollar, Rising Yields Add Pressure

New York, October 8, 2026: Gold prices fell to a two-month low on Wednesday as a stronger US dollar and rising Treasury yields reduced the appeal of the non-yielding precious metal. Investors also remained focused on the Federal Reserve’s interest-rate outlook for clues about the direction of bullion prices.

Spot gold declined around 1.6% to $4,096.13 per ounce, touching its lowest level since August 5. US gold futures for December delivery also fell about 1.6% to $4,121.70. The dollar index gained 0.7%, making dollar-priced gold more expensive for buyers using other currencies.

Higher Yields Weigh on Bullion

A major source of pressure was the rise in US Treasury yields. The 10-year Treasury yield reached a level not seen in more than two decades, increasing the opportunity cost of holding gold, which does not generate interest income.

Markets were largely expecting the Federal Reserve to leave interest rates unchanged later in October, while continuing to price in the possibility of another rate increase in December. Comments from Fed officials have also kept attention focused on persistent inflation pressures and the possibility that borrowing costs could remain elevated for longer.

Central Bank Demand Offers Some Support

Despite the latest decline, gold continues to receive support from official-sector buying. China’s central bank increased its gold holdings in September, extending its purchasing streak to 23 consecutive months, according to official data.

Analysts quoted by Reuters suggested gold could face another test around the $4,000-per-ounce level before potentially recovering later in the year, although the outlook remains dependent on interest rates, the dollar and official demand.

The precious-metal sell-off also extended beyond gold. Silver, platinum and palladium recorded significant declines during the session, highlighting broader weakness across the metals market.