Gold Prices Slip as U.S. Q3 GDP Beats Forecast and Rate-Hike Expectations Rise

Gold prices retreated on Tuesday as market participants focused on stronger-than-expected U.S. economic data and the prospect of a further Federal Reserve rate hike. The U.S. Bureau of Economic Analysis reported third-quarter gross domestic product growth of 3.4% year-over-year, above the 3.2% forecast, indicating continued robust expansion.

The Federal Reserve left the federal-funds rate unchanged at its most recent meeting, and Chair Jerome Powell said the decision was not influenced by upcoming midterm elections. Nonetheless, the FedWatch tool showed a 79.6% probability of a rate increase at the December meeting, with some market participants also pricing in a hike in March 2027.

Treasury yields fell despite the rate-hike outlook, with the two-year yield slipping toward 4.66% and the ten-year yield dropping below the 5.00% psychological level. The weaker dollar, which fell against a broad basket of currencies, typically supports dollar-denominated commodities, but it did not lift gold in the session.

In Europe, the European Central Bank kept its policy rate unchanged, matching expectations, while signaling a possible rate increase at its December meeting.

Technical analysis shows gold attempting to hold above the $4,000-$4,020 support zone. A break below could push the metal toward the next support range of $3,890-$3,910, while the relative strength index remains in moderate territory, leaving room for further moves if new catalysts emerge.