Gold Climbs Above 4150 on Easing Yields and Fed Policy Speculation

Gold prices surged to nearly $4,165 during Wednesday's early Asian trading session. The rally came as long-dated Treasury yields retreated from their multi-decade highs, and oil prices declined. Investors are now focused on the release of the Federal Open Market Committee (FOMC) minutes later in the day, which could provide insights into the Federal Reserve's future monetary policy.

The 10-year Treasury yield dropped more than 2 basis points to 5.286%, after hitting its highest level since April 2002 in the previous session. Similarly, the 30-year Treasury yield fell to 5.661%, while the 2-year yield declined over 3 basis points to 4.798%. Lower bond yields and falling oil prices reduced inflation concerns and eased fears of further Fed rate hikes, providing support for gold.

Traders now assign a 79.5% probability that the Fed will maintain interest rates at its October policy meeting, according to the CME FedWatch tool. Analysts at Commerzbank noted that gold has stabilized around $4,150 per troy ounce, as concerns about rapid US interest rate hikes have slightly eased. They also pointed out that ETF investors have not reduced their exposure, which has helped underpin prices.

Looking ahead, consultancy firm Metal Focus forecasts new record prices for gold by 2027, anticipating a rise in investor interest. Meanwhile, Fed official Schmid delivered a hawkish speech, emphasizing inflation risks and the need for price stability, which could keep policy tight and support elevated rate expectations.

Technically, gold remains under pressure, trading below the 100-day simple moving average and the Bollinger Bands’ middle line. Initial resistance is seen around $4,265-4,270, while immediate support is near $4,090.