XAU/USD remains elevated despite rising Treasury yields as geopolitical tensions and a softer dollar counter Fed tightening bets.
Gold prices held above $4,100 in early Asian trading Thursday, recovering from a minor pullback as a weaker US dollar offset pressure from rising Treasury yields. The 10-year Treasury yield hovered near a two-month high amid expectations the Federal Reserve may hike rates by year-end, with traders pricing in over a 90% probability, according to the CME Group’s FedWatch Tool.
Escalating US-Iran tensions and disruptions in key oil shipping routes lifted crude prices to their highest since June 11, stoking inflation fears. The conflict has extended for 12 consecutive nights, while Yemen’s Houthis imposed a blockade on a critical Red Sea route handling 7% of global oil supply, exacerbating supply concerns.
Despite the hawkish backdrop, gold found support from a modest USD retreat, though elevated bond yields continued to cap gains for the non-yielding asset.