Gold Prices Cap at $4,280 Amid Elevated Yields and Fed Hike Bets

Gold prices steadied at $4,280 on Friday after two days of declines, despite earlier reaching $4,254. The metal's upside was capped by elevated US yields and inflation expectations, which continue to influence market bets for a Federal Reserve rate hike.

The 10-year Treasury yield slipped to 5.192%, while core Durable Goods Orders rose above estimates in August. Consumer sentiment weakened, with the University of Michigan index falling to 48.1 from 51.7. One-year inflation expectations rose to 4.6% and five-to-ten-year expectations edged up to 3.4%.

The odds of an October rate rise are at 64%, according to Prime Terminal, with an implied probability for December nearly at 93%. Oil's retreat helped ease pressure on the US dollar, but this relief may be short-lived given ongoing geopolitical tensions.