Gold Bounces Off Two-Month Low Amid Ongoing Middle East Tensions

Gold prices rebounded towards $4,400 as Middle East tensions offset near-5% US yields. The precious metal extended gains on Friday, up 0.89% to $4,379 after earlier sliding to a near two-month low of $4,235.

The Federal Reserve's rate hike and elevated bond yields, with the US 10-year Treasury yield up nearly six basis points to 4.996%, might have been expected to weigh on gold prices.

However, support came as oil prices softened even while Middle East tensions persisted, with the US and Iran exchanging attacks in the Persian Gulf and conflict continuing in the Red Sea between the Houthis and Saudi Arabia.

The Houthi rebels attacked the Arabian East-West Oil pipeline, forcing a shutdown that could delay shipments to Europe. West Texas Intermediate remained subdued, while the US Dollar Index (DXY) was almost flat at 100.29.