Gold (XAU/USD) concluded the week on a slightly positive note after a bearish start, with the precious metal finding support amid fluctuating US yields and geopolitical tensions. The week began with Gold struggling to make significant moves due to rising US Treasury bond yields, but it managed to hold steady thanks to a risk-averse market atmosphere. On Tuesday, a correction in the 10-year US Treasury bond yield and a weaker US Dollar allowed Gold to rebound modestly, closing about 0.6% higher.
Midweek, US Treasury yields surged to a two-decade high of 5.36%, pushing Gold below $4,100 for the first time in two months. The Federal Reserve's September policy meeting minutes suggested another interest rate hike by year-end, causing yields to retreat slightly and helping Gold recover some losses. Geopolitical concerns also played a role, as news of potential US military action in Iran initially revived fears but later eased after President Donald Trump's comments on productive discussions with Iran.
On Thursday, Gold benefited from an easing of geopolitical tensions and a dovish shift in Fed pricing, extending its rebound to the $4,200 region on Friday. Deutsche Bank noted a sharp intraday turnaround in US Treasuries, with the 10-year yield closing down -5.7bps on the day. Fed Governor Christopher Waller's remarks on the need for further rate hikes but with flexibility in pace also influenced market sentiment.
Looking ahead, Gold investors are closely watching the upcoming US Consumer Price Index (CPI) data for September, expected to rise 0.6% monthly and core CPI by 0.2%. A stronger-than-expected CPI print could put bearish pressure on Gold, while a softer reading might support an extended rebound. Geopolitical developments, particularly in the Middle East, will also continue to impact Gold's trajectory, with TD Securities analysts predicting a persistent appetite for the precious metal driven by macro and geopolitical concerns.