Gold Stabilizes Near $4,380 Amid Falling Oil and Lower Treasury Yields

Gold prices have stabilized near $4,380 an ounce as falling oil prices and lower long-term Treasury yields offset pressure from expectations that the Federal Reserve will raise interest rates again before year-end. The US 10-year Treasury yield has eased towards 4.97%, while Brent crude has fallen towards $101 a barrel.

The Fed raised its target range by 25 basis points to 3.75%-4% last week and made clear that inflation remains too high, creating an awkward backdrop for bullion because higher interest rates increase the opportunity cost of holding an asset that pays no income.

Konstantinos Chrysikos of Kudo.com told The Wall Street Journal that gold could remain constrained while investors expect further tightening, but Goldman Sachs analysts expect Fed tightening to slow rather than derail gold's longer-term advance. They cut their year-end target to $4,650 but said stronger-than-expected central-bank purchases and persistent investor demand continue to offset part of the drag from higher rates.