Gold Rebounds 2% to $4,381 as Yields Ease
Spot gold climbed 2% to $4,381 per ounce as falling oil prices and retreating Treasury yields reduced pressure on the bullion market.
Spot gold rose by more than 2% to reach $4,381 per ounce. US gold futures climbed above $4,400 an ounce. This gain followed a sharp drop in the previous session. Bullion had fallen to its lowest level in over a month. The decline occurred after the Federal Reserve raised interest rates for the first time since 2023.
Oil prices fell to a one-week low. Saudi Arabia is seeking to restore flows through a key pipeline. Lower crude prices reduced inflation concerns. This removed pressure from the gold market. The inverse relationship between energy costs and bullion prices weakened as supply disruptions eased.
Treasury yields retreat from spike
US Treasury yields eased from Wednesday's jump. Higher yields typically weigh on gold because the metal pays no interest. Bond yields are correcting from an overreaction. This recovery in Treasuries provided support for bullion. Elevated yields may continue to cap gold in the near term.
Fed policy outlook remains uncertain
The Federal Reserve has pencilled in another rate increase this year. It may add two more hikes in 2027. Traders see a 51% chance of a hike in October. This is up from 44% a day earlier. Higher rates remain a headwind for the metal.
UBS strategist Giovanni Staunovo notes that rising fiscal deficits support gold. Higher debt burdens and a weakening US dollar are also factors. The Fed is expected to resume easing next year. These long-term factors should support gold despite near-term volatility. GN auto markets/commodities: gold prices reported the latest movements.
