Gold Rallies Despite Elevated Yields as Central Banks Remain Supportive

Gold prices have broken higher after a period of consolidation following a sharp breakout in early August.

The move was preceded by several supportive developments, including a dovish Federal Reserve meeting and an unusual US-Japan intervention episode to support the yen.

Central bank gold demand remains broadly supportive, according to a World Gold Council report, which showed that central banks expect to continue adding to their holdings.

Gold has shruggged off elevated US real yields, historically a headwind for non-yielding assets like gold. However, the rally suggests factors elsewhere have been powerful enough to offset this trend.

The longer-term technical picture shows that gold's price action has broken through key resistance levels, with the $4,367 level now overhead as a key target.