Gold Defies Expectations as Yields Surge

The gold market has been experiencing some volatility lately, but despite surging yields, it hasn't broken down as aggressively as expected. In fact, since Kevin Warsh's hawkish comments in June, weakness in gold only went so far before buyers stepped in and held the lows for over a month.

This pattern repeated itself after Warsh's next meeting atop the Fed, with a breakout in August following his statements. However, since then, the market has been experiencing '2025-like action', characterized by evasive price movements and tepid declines.

The weekly chart shows underside wicks forming as gold saunters lower, leaving investors wondering if it can continue to defy expectations. Despite monetary policy tightening globally, including a likely hike from the RBA, AUD/USD faces a more balanced rate backdrop than it did entering Q3.