Gold Stabilizes Below $4,350 as Yields Outweigh Fed Rate-Hold Expectations

Gold prices have steadied below $4,350 per ounce as rising Treasury yields offset support from growing expectations that the Federal Reserve will hold interest rates steady. The precious metal has been trading in a narrow range, with investors weighing the impact of higher borrowing costs against the prospect of a prolonged pause in rate hikes.

The recent surge in U.S. Treasury yields, particularly on the 10-year note, has increased the opportunity cost of holding non-yielding assets like gold. This pressure has counterbalanced the supportive sentiment stemming from futures markets, which now price in a high probability that the Fed will keep its benchmark rate unchanged.

The CME FedWatch Tool shows a 94% chance of a rate hold at the next Federal Open Market Committee (FOMC) meeting, up from 89% a month earlier. This shift in expectations has provided a floor under gold prices, as lower future rate expectations typically weaken the dollar and boost bullion’s appeal.

Analysts note that a breakout above $4,400 could trigger further buying, but a sustained move below $4,300 might open the door for a correction toward $4,200. Central bank buying remains a key pillar of demand, with several emerging-market central banks continuing to diversify their reserves away from the U.S. dollar.