Asian Demand and Central Bank Buying Push Gold Prices Higher
Gold prices have been steady near record highs as strong demand from Asia and central banks offsets pressure from a strengthening US dollar. The precious metal has traded in a narrow range of $4,250 to $4,400 per ounce, despite a two-month high in the dollar due to expectations of further Federal Reserve tightening.
Typically, rising real Treasury yields would have a negative impact on gold prices, but this correlation has weakened. Instead, investors are increasingly favoring gold over government debt due to concerns about rising US public debt and financial-stability risks.
Central banks have been major buyers of gold in recent years, purchasing an average of over 1,000 metric tons annually between 2022 and 2026. Gold reserves now exceed US Treasuries in total value within global official portfolios.