Gold Rallies as US Bond Yields Stabilize
Gold prices rose after pressure from the US bond market began to ease. Bullion climbed as much as 0.6% to trade above US$4,355 per troy ounce, recovering from the previous session's nearly 2% drop—the steepest daily decline in almost a month.
The rebound followed a stabilization in US Treasuries after a sharp sell-off. Previously, the 30-year US bond yield hitting a nearly two-decade high had weighed on gold, as higher borrowing costs typically burden assets that do not generate interest income.
In recent weeks, gold has recovered to trade around US$4,400 per troy ounce, supported by rising investor demand and central bank purchases, particularly from China. A Bank of America fund manager survey also indicated that a growing number of investment managers view gold as undervalued, reaching the highest proportion since March 2023.
However, gold's upside remains capped by fading hopes for a peace deal between the US and Iran. US President Donald Trump emphasized that no talks are underway with Tehran, while the status of the Strait of Hormuz remains uncertain after a memorandum of understanding signed by both nations in June expired without plans for renewal.
Uncertainty surrounding Hormuz has bolstered oil prices and kept the risk of energy-driven inflation high. This situation could pressure the Federal Reserve to maintain a hawkish stance or even raise interest rates—factors that act as headwinds for gold. Market focus has now shifted to the release of the Fed's July meeting minutes and a speech by Fed Chair Kevin Warsh at the Jackson Hole symposium next week.
In recent trading, spot gold rose 0.5% to US$4,357.07 per troy ounce as of 11:34 a.m. Singapore time. Meanwhile, silver fell 0.6% to US$62.99 per ounce, and platinum and palladium saw slight gains, while the Bloomberg Dollar Spot Index weakened by 0.1%.
Newsmaker Analysis: Gold's current movement remains in a recovery phase but is not yet entirely free from pressure. Stable US yields provide room for XAU/USD to rebound; however, the situation near the Strait of Hormuz, persistently high oil prices, and the direction of Federal Reserve policy remain limiting factors. As long as gold holds above the US$4,300 level, the possibility of a return to US$4,400 remains open; however, if the Federal Reserve minutes strike a hawkish tone, gold risks a renewed correction. (asd)*
Source: Newsmaker.id
