Gold Prices to Rise Despite High US Yields Amid Debt Concerns

Gold prices are expected to rise into 2027 despite high US yields and interest rates. Central bank purchases and concerns over US government debt continue to support demand for gold, analysts say.

The price of gold has had a mixed year, surging to a record high of $5,594.82 an ounce in January before retreating sharply to around $3,942 in June. It has since regained some ground and was trading at around $4,360 on September 21.

Zavier Wong, market analyst at eToro, said the recent rise in US Treasury yields is partly driven by concerns over the amount of debt being issued by the US government to fund its deficit. While higher interest rates make gold less attractive, concerns over US finances are encouraging investors to turn to gold as an alternative.

Wong noted that central banks are also buying gold to protect against financial crises and currency risks. The US Federal Reserve's 25-basis-point rate increase on September 16 is unlikely to be enough to reverse those purchases.