Gold Edges Higher as US Bond Yields Stabilise

Gold prices edged higher on Wednesday as US bond yields stabilised after surging to their highest level in almost two decades. Spot gold rose 0.5% to $4,357.07 an ounce at 11:34 a.m. in Singapore.

The increase in gold prices comes after the precious metal fell by nearly 2% on Tuesday following a selloff in US bonds. Treasuries steadied on Wednesday, relieving pressure on gold, which doesn't pay interest and is typically negatively affected by higher borrowing costs.

Gold has recovered in recent weeks to trade around $4,400 an ounce, supported by renewed investor demand and central-bank buying, particularly from China. A fund manager survey by Bank of America Corp. showed that the share of respondents who said gold was undervalued hit its highest level since March 2023.

However, the dimming prospects for a peace deal between the US and Iran may keep a lid on further gains in gold prices. The recent surge in flows into precious metals appears to be easing, according to Ryan McKay, an analyst from TD Securities.