• Gold prices rise as US 10-year Treasury yield drops to 4.03%, enhancing the appeal of non-yielding assets.
• The New York Empire State Manufacturing Index shows weakness, but inflation expectations revised upward in September.
• Geopolitical tensions add to Gold’s safe-haven allure as investors brace for key US economic data later this week.

Gold prices advanced Tuesday as US Treasury bond yields retreated, capping US Dollar gains. A light economic docket featured the New York Empire State Manufacturing Index and the release of the NY Fed Consumers Expectations Survey. The XAU/USD trades at $2,664.

The New York Fed revealed the Empire State Manufacturing Index for September, which printed a dismal figure. Meanwhile, inflation expectations were upwardly revised in September, according to the latest NY Fed Consumers Expectations Survey.

The yield of the US 10-year Treasury note dropped eight basis points (bps) down to 4.03%, making the non-yielding metal more appealing while signaling increasing demand for US Treasury bonds.

Bullion prices extended their gains after bouncing off a daily low of $2,638, although the buck remains firm. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six currencies, is virtually unchanged at 103.25.

Aside from this, Federal Reserve (Fed) officials continued to grab the headlines. San Francisco Fed President Mary Daly said the Fed’s dual mandate risks are now in balance and that the labor market is not a source of inflation. She added that she’s cautiously optimistic about the economic outlook and foresees one or two rate cuts “if forecasts are met.”