Gold Fails to Hold Gains as Dollar Strengthens

Gold prices stalled at $4,076 an ounce on Friday, ending July's final session slightly lower than its opening price. Despite a two-session rally that was triggered by Japan's massive yen-buying intervention on Thursday, gold was unable to sustain its gains as the dollar firmed up.

The Bank of Japan intervened in the foreign exchange market for the first time in three months, buying yen and selling dollars in an unprecedented operation worth ¥8.45 trillion ($53 billion). The move sent the yen soaring by 3.35% against the US dollar, causing gold to rise temporarily.

However, as the dollar recovered its losses on Friday, gold prices began to decline. The metal's two-day advance was largely attributed to the central bank operation rather than any increase in investor demand.

The sensitivity of gold to changes in interest rates remains a key factor in its price movements. As the 10-year Treasury yield rose by almost 7 basis points to 4.731%, gold dropped approximately $20 per ounce, accounting for a significant headwind on Friday.