Gold Price Outlook: Can Gold Recover by Year-End Despite Bond Yield Hikes?

Gold prices are facing headwinds in Q3 due to rising bond yields and inflation pressures, but Fawad Razaqzada, Market Analyst at FOREX.com, believes that gold's downside could be limited through the final quarter of 2026.

Razaqzada points out that despite sharp increases in US Treasury yields, which have reached their highest level in roughly 20 years, gold has managed to hold its ground above $4,100 an ounce. While prices are down from last month's highs around $4,700 an ounce, Razaqzada is optimistic about the prospects for Q4.

The main driver of gold's performance remains US monetary policy, with markets pricing in at least one more rate hike before year-end. However, Razaqzada notes that if investors lose faith in the Fed's ability to control inflation or yields, the dollar debasement trade could resurface and support prices for gold and other assets.

Looking ahead, Razaqzada sees potential for gold prices to push higher as central banks are expected to continue purchasing gold through the fourth quarter. This could lead to a break above $4,400, with initial targets around $4,500 and potentially reaching $5,000 from a bullish perspective.