Gold Resists Rising Yields as Markets Doubt Fed's Hike Plans

Commerzbank's Carsten Fritsch notes that gold remains steady at around $4,400 per ounce despite rising US Treasury yields. The yield on 10-year US Treasuries has reached 4.74%, nearly matching the level seen at the end of July. At that time, gold was trading at $4,040, significantly lower.

Fritsch suggests markets may doubt the Fed's ability or willingness to hike interest rates sufficiently to combat inflation effectively. Another possible explanation is fiscal risks, particularly rising government debt, which could limit key interest rate increases.

Both of these explanations would be positive for gold, according to Fritsch. He also points out that ETF flows have shown renewed investor interest after recent outflows, indicating that markets may be supporting the gold price.