Gold Prices Rebound on Stabilized US Bond Yields

Gold prices rose on Wednesday after US bond yields stabilized following a significant surge in yields. The precious metal climbed as much as 0.6 per cent to trade above $4,360 an ounce, reversing some of its losses from the previous session.

The stabilization in Treasuries came after a sharp sell-off that sent yields on 30-year notes to their highest level in almost two decades. This decrease in borrowing costs is beneficial for gold, which does not pay interest.

Gold has been recovering in recent weeks, trading around $4,400 an ounce, driven by renewed investor demand and central bank buying, particularly from China. A Bank of America fund manager survey showed that the share who said gold was undervalued reached its highest level since March 2023.

However, the prospects for a peace deal between the US and Iran remain dim, which could limit further gains in gold prices. The memorandum of understanding signed by the two countries has expired without an extension plan, buoying oil prices and putting pressure on the US Federal Reserve to raise interest rates.