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Gold rebounds from eight-week low as Fed rate path in focus

The US 30-year Treasury yield rose above 5.6% Tuesday, a level last seen in 2002, while the two-year yield settled near 4.9%.

Reported · Written up by our desk · Precious Metals

Gold prices rebounded from an eight-week low in early Asian trade on Wednesday, moving toward $4,180 as traders reassessed the US Federal Reserve rate path, FXStreet reports.

The outlet said oil-driven inflation concerns reinforced expectations for tighter monetary policy, with a stronger US dollar and higher US Treasury yields weighing on gold’s upside.

FXStreet added that the US 30-year Treasury yield surpassed 5.61% on Tuesday, a level last seen in 2002, while the two-year yield declined as much as five basis points before settling around 4.88%.

The piece also noted that rising energy prices can boost inflation through higher costs, and that a high interest rate environment can increase the opportunity cost of holding gold, given the metal does not yield.

Latest closeGold $4,157.80 ▲0.4%

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