Gold Prices Rise Amid Geopolitical Tensions and Higher US Bond Yields

Gold and silver prices rose slightly on Tuesday despite pressure from higher crude oil prices and US bond yields. Geopolitical tensions offered safe-haven support.

The price of gold was trading at $4,493.70 per ounce, up 0.27%, while silver was at $66.64 per ounce, higher by 0.63%. The moves come after gold faced selling pressure on Monday as investors increased bets that the US Federal Reserve could raise interest rates this month.

The biggest headwind for gold currently is the rise in US bond yields. The US 10-year Treasury yield climbed to around 4.78%, its highest level in nearly 20 months, as markets reassessed the outlook for US interest rates. Higher bond yields increase the opportunity cost of holding gold, which does not generate interest income.

Markets have also increased their expectations of a September Fed rate hike following recent hawkish comments from Fed Chair Kevin Warsh. Higher-for-longer interest rates can weigh on gold because they make interest-bearing assets relatively more attractive.