Saxo Bank argues high Treasury yields may reflect fiscal risks rather than growth, reducing their drag on gold prices.
Gold prices hovered near $4,500 as Saxo Bank suggested persistently high long-end Treasury yields may no longer weigh on bullion. The shift stems from concerns over fiscal and term premiums rather than economic growth or policy tightening, weakening the historical inverse relationship between yields and gold.
Supportive factors include fading Fed rate hike expectations, a weakening dollar, renewed ETF inflows, and steady central bank demand. The 200-day moving average at $4,500 acts as a key technical level, with a break above potentially fueling further momentum and ETF demand. A drop below $4,200 could signal consolidation.
The primary risk remains a surprise inflation or employment shock, which could revive real yields and the dollar, undermining gold’s recent rebound.