Gold Holds Firm Amid Rising Bond Yields

Gold prices have held steady above $4,420 an ounce despite a sharp rise in bond yields to their highest level since 2007. This suggests that investors are shifting from expecting interest rates to fall to anticipating real demand for safe-haven assets.

The US Treasury yield has climbed to about 4.72% and the 30-year yield touched 5.32%, but gold prices have absorbed this pressure, indicating that rate expectations are not the only force at work.

Investment demand has improved, with global physically backed gold ETFs attracting $3 billion in July and holdings increasing by 23 tonnes to 4,068 tonnes. This gives the market a firmer base than a rally driven purely by short-term Fed positioning.