Gold Rallies on Softer Yields as Fed Hikes Loom

Gold prices rebounded for the second consecutive session, reaching a new weekly high ahead of the European open on Friday.

The move coincided with a further pullback in U.S. bond yields from multi-year peaks, which eased immediate concerns about rapidly accelerating inflation and limited upside in the U.S. Dollar (USD).

However, the advance in gold remained tentative due to the U.S. Federal Reserve's firm policy stance, which continued to lend underlying support to the Greenback.

Analysts at UOB Group noted that the Fed's return to a renewed hiking cycle is reshaping the outlook for the U.S. Dollar, with potential upside risks to USD forecasts against both G-10 and Asian currencies.