Central Banks Counterbalance Rising Yields as Gold Prices Remain Steady

Gold prices held near $4,144 per ounce as central banks and institutional investors offset the pressure from rising yields. Despite a softening outlook for US interest rates, gold failed to build a durable rally on Friday.

The spot price slipped 0.8% on the day due to a firmer dollar and stubbornly elevated Treasury yields. The weak US employment report released in September added some relief from rate-hike fears but only briefly, as higher bond yields reclaimed control of the market.

Central banks remain committed gold buyers, with net acquisitions estimated at 44 tonnes for July. China's official reserves expanded by 20.2 tonnes in August, lifting gold's share of the country's total foreign-exchange holdings to roughly 9%.