Gold Stabilizes as Pipeline Repairs Ease Inflation Fears
Gold prices have stabilized following repair work on the damaged Saudi East-West pipeline, which had previously fueled inflation fears and boosted interest rates. The Houthi attack on the pipeline was a significant concern for global commodity markets, but reports of progress in repairs have eased those concerns.
As a result, gold has benefited from the shift in sentiment. It closed Friday at $4,382.82 an ounce, up 0.9%, and has since continued to rise, reaching $4,384.09. This represents a gain of approximately 1.9% above its 50-day average of $4,304.24.
The rebound in gold prices is also reflected in the fixed income market. Yields on benchmark 10-year US Treasuries have pulled back to around 4.93%, down from briefly breaching the psychologically important 5% mark.
However, investors are still navigating a mixed policy landscape. The Federal Reserve raised its benchmark rate by 0.25 percentage points to a range of 3.75% to 4.00%, while the Bank of England left its key rate unchanged.
A steady pillar of institutional demand underpins gold prices, with central banks snapping up 288.9 tonnes of gold in the second quarter of this year, a jump of 62.4% from the same period last year.