Gold Prices Hit Two-Month Low Amid Rising US Real Yields
Gold prices are down by over 2.5% this week due to elevated US real yields, a firm dollar, and hawkish central-bank policies. At $4,271.54 an ounce, spot gold fell 0.1% as the dollar index reached its highest level in almost two months at 101. The US 10-year yield also climbed to its highest since July 2007 at 5.11%, following stronger-than-expected private-sector data that reinforced the case for further tightening.
The Federal Reserve's rate hike expectations have increased, with markets now pricing in a 70% probability of another rate hike in October. This has put pressure on gold, making it difficult to rebound from its current levels. However, analysts expect structural factors such as central-bank buying and reserve diversification to keep the longer-term outlook supportive.
Elara Securities expects gold to trade between $4,200 and $4,700 per ounce for the rest of 2026, with prices potentially rising further to $5,000-$5,200 per ounce by end-2027. The brokerage house also noted that global central banks have been buying gold as a strategic reserve asset, with reported purchases totaling around 130 tonnes year-to-date.