Gold Prices Rise as Lower Oil and Treasury Yields Ease Inflation Pressure

Gold prices have risen as lower oil and Treasury yields ease inflation pressure on investors. At 04:42 ET (08:42 GMT) on Friday, gold had climbed 1.0% to $4,385.76 an ounce, while gold futures gained 0.6% to $4,425.20 an ounce.

The easing energy pressures have offered some relief to investors worried that energy-driven inflationary pressures will fuel a monetary policy tightening cycle around the world.

Mirroring similar recent moves by the Federal Reserve and the European Central Bank, the Bank of Japan became the latest central bank to raise interest rates on Friday, noting concerns that inflation was coming increasingly close to crossing its 2% annual target.

However, analysts at ING said the moderating oil prices have 'taken the edge off' strength in the U.S. dollar following the Fed's first rate hike in three years on Wednesday, but they flagged 'upside risks' to the greenback after a hawkish message from the Fed gave 'the green light to markets to fully price in a hike in October if data and energy prices suggest so'. A firmer dollar can dent gold by making it more expensive for overseas buyers.