Gold Price Rebounds 17% from June Lows Amid Rising US Treasury Yields

Gold prices have rebounded sharply in recent weeks, rising nearly 17% from their June lows. The gold price on the COMEX market currently stands at around $3,942 per ounce, while in India, the MCX gold rate is ₹1,62,500 per 10 gm.

The recovery in gold prices can be attributed to a confluence of structural and macroeconomic factors, according to Sugandha Sachdeva, Founder of SS WealthStreet. Persistent central-bank accumulation continues to provide strong demand for gold as reserve managers seek diversification amid geopolitical uncertainty and rising sovereign debt.

The return of investment flows into gold ETFs has also provided an additional source of demand, signalling renewed investor appetite after the earlier phase of outflows.

However, the rebound in gold prices may not be a straightforward positive for the metal. Sugandha Sachdeva notes that rising US Treasury yields can normally be negative for gold as they increase the opportunity cost of holding a non-yielding asset.

But if policy measures help stabilize long-term yields and exert downward pressure on the dollar, the macro backdrop becomes more supportive for gold.