Gold gains despite strong dollar, US Treasury yields

Gold prices rose today, Friday, despite pressure from the strength of the dollar and the rise in US Treasury bond yields, while investors are evaluating the decisions of major central banks to adhere to high interest rates.

According to Reuters, gold rose in spot transactions by 0.2% to $1,923.29 per ounce by 0350 GMT, after recording the largest daily decline since September 5. US gold futures also increased 0.2% to $1,943.10.

Central banks in the world’s largest economies announced their commitment to keeping interest rates high as long as this is necessary to curb inflation.

“The markets looked at central banks and said, ‘You are not holding back on raising interest rates now because inflation has been beaten, but because you are concerned that global growth is about to stop,’” said Ilya Spivak, head of global macroeconomics at Testilife.

He continued, “There is a very strong feeling that global growth is no longer able to withstand.”

The dollar stabilized near the highest level in six months amid expectations that interest rates in the United States would remain high for a longer period, while benchmark ten-year Treasury bond yields rose to the highest level in 16 years.

Investors usually buy gold as a hedge during times of economic uncertainty, but high interest rates affect the prices of bullion, which does not generate returns and is priced in dollars.

Markets expect by 45 percent that the Federal Reserve (the US central bank) will raise interest rates again before the end of the year.

As for other precious metals, silver rose in spot transactions by 0.4% to $23.47 per ounce, and is on track to record its best performance in 4 weeks.

Platinum increased 0.7% to $925.77, and palladium jumped 0.8% to $1,272.85.