Gold Prices Defy Rise in US Treasury Yields

Gold prices have remained steady at around $4,400 per ounce despite a recent rise in US Treasury yields.

According to Carsten Fritsch of Commerzbank, gold has decoupled from real interest rates and is instead being supported by markets that may doubt the Federal Reserve's willingness or ability to hike interest rates sufficiently, or fear fiscal risks such as rising government debt.

Fritsch notes that although 10-year US Treasury yields have risen to nearly 4.74%, almost returning to their level at the end of July, market-based inflation expectations have hardly changed since then, keeping real interest rates in line with those seen at the end of July.