Gold Falls Amid Rising Treasury Yields and Inflation Concerns

Gold prices have been under pressure this week due to rising US Treasury yields and concerns over persistent inflation. Despite edging higher on Friday, gold remained on track for a weekly decline of around 2.1%. The spot price rose by just 0.1% to $4,282.98 per troy ounce at 2:05 p.m. US time.

According to Bybit's Chief Market Analyst Han Tan, the surge in Treasury yields has put gold on track for its fourth weekly decline in five weeks. The yield on 10-year US government bonds reached a new 19-year high, increasing the opportunity cost of holding non-yielding assets like gold.

The Federal Reserve raised interest rates by 25 basis points last week, and market participants are now pricing in a 66% probability of another rate hike in October and a 93% probability in December. This hawkish stance from the Fed has reduced gold's appeal as investors shift towards income-generating assets.