Gold Rebounds Above $4,150 as Dollar and Treasury Yields Fall
Gold prices recovered on Thursday, climbing back above $4,150 an ounce following a sharp sell-off in the prior session. Spot gold rose more than 1% to around $4,159 after touching a one-week low near $4,073 on Wednesday, while December futures approached $4,180. The rebound was driven by a pull-back in both the U.S. dollar index from an 18-month peak and the 10-year Treasury yield toward 5.09%.
Lower Treasury yields reduce the opportunity cost of holding non-yielding bullion, giving gold relief even as U.S. inflation remains higher than expected. Expectations for an immediate October rate hike by the Federal Reserve dropped to around a quarter after central bank officials advocated for a cautious approach. San Francisco Fed President Mary Daly indicated more rate increases might eventually be needed without signaling immediate urgency, while Vice Chair Michelle Bowman favored waiting for additional economic data before making policy changes.
Investors are turning their focus to upcoming producer price index and retail sales figures, as well as a speech by Fed Chair Kevin Warsh on Friday. Gold continues to face technical resistance around the $4,200 level, while strong structural demand from central bank purchasing and ETF inflows is expected to maintain price support between $4,000 and $4,100.
Key points
- Spot gold rose more than 1% to around $4,159, recovering from a one-week low of $4,073 touched on Wednesday.
- The U.S. dollar index pulled back from an 18-month high while the 10-year Treasury yield dropped toward 5.09%.
- Federal Reserve officials advocated patience, reducing the market probability of an October rate hike to roughly 25%.
- Traders are awaiting new producer price and retail sales data alongside a scheduled appearance by Fed Chair Kevin Warsh.
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How we writeDisclaimerQuestions and answers
Why did gold prices rise on Thursday?
Gold rebounded above $4,150 per ounce as the U.S. dollar pulled back from an 18-month high and 10-year Treasury yields fell toward 5.09%, reducing the cost of holding non-yielding precious metals.
Will the Federal Reserve raise interest rates in October?
The probability of an October rate increase fell to about 25% after Federal Reserve officials suggested taking time to evaluate economic data before deciding on further tightening.
What key price levels are analysts watching for gold?
Gold faces immediate technical resistance near $4,200 per ounce, while structural demand from central banks and ETF inflows is expected to support prices between $4,000 and $4,100.