Gold Holds Ground at $4,400 Amid Dollar Weakness and Hawkish Expectations

Gold prices hovered around $4,400 an ounce on Thursday as a softer US dollar offset pressure from elevated Treasury yields. The dollar remained close to a three-week low, helping bullion despite the 10-year Treasury yield trading around 4.84%, near its highest level since 2023.

Analysts attribute this mismatch between yields and the dollar's strength to shifting expectations for rate hikes. Filip Andersson from Danske Bank pointed out that investors expect a Bank of Japan rate increase, combined with the possibility that the Fed stays on hold, have helped push the dollar lower against the yen.

This currency weakness has provided an important offset for gold because it makes dollar-priced bullion cheaper for buyers using other currencies. However, a hotter-than-expected inflation reading could quickly change this balance by strengthening the dollar and encouraging a more hawkish Fed.