Gold pauses for breath as US yields, dollar move higher

Gold took a breather after surging to a record high on Monday, as higher U.S. Treasury yields and dollar offset support from growing uncertainties surrounding the U.S. presidential election and the Middle East war.

Spot gold was little changed at $2,723.35 per ounce, as of 11:35 a.m. ET (1535 GMT), after hitting a record $2,740.37 earlier in the session. U.S. gold futures were 0.3% higher at $2,737.80.

"The 10 year yields are moving a lot higher, the dollar index got stronger. And that's putting some weight on gold," said Daniel Pavilonis, senior market strategist at RJO Futures.

Benchmark 10-year Treasury yields rose to a 12-week high, while the dollar index gained, making gold more expensive for overseas buyers.

Bullion, considered a hedge against political and economic uncertainty, has climbed over 31% so far this year, shattering multiple record peaks as the Federal Reserve's interest rate cut combined with safe-haven demand set up a perfect storm for gold.

"We're getting closer to the U.S. elections, a couple of weeks out now... we're seeing geopolitics play out in the Middle East, Israel, Iran, whatever kind of stuff is going on behind the scenes," Pavilonis said.

With the U.S. presidential election just over two weeks away, former President Donald Trump and Vice President Kamala Harris are caught in a knife-edge battle to win over some of the more competitive states.

Platinum rose 0.7% to $1,006.48 per ounce. Palladium fell 2.7% to $1,050.91.