From The Economic Times · ET CONTRIBUTORS · · 1m 40s
Gold Faces Selling Pressure from Rising Yields and Dollar
Rising US bond yields and dollar recovery weigh on gold prices.
In brief
Rising US bond yields and dollar recovery weigh on gold prices. Higher US Treasury yields and a stronger dollar reduce gold's appeal as central banks continue buying. Originally reported by The Economic Times.
Gold Under Selling Pressure
Gold faces renewed selling pressure after the US Fed raised its benchmark interest rate by 25 basis points to 3.75-4.00 percent on September 16.
Treasury Yields Rise to 5.25%
The benchmark 10-year US Treasury yield recently moved towards 5.25 percent, its highest level since 2007, while the Dollar Index recovered above the 101 mark.
Stronger Dollar and Higher Yields
Higher US interest rates improve the relative attractiveness of dollar-denominated assets, encouraging global capital flows towards the greenback.
Yield Impact on Gold
For gold, this combination is particularly challenging as a stronger dollar makes bullion more expensive for buyers using other currencies.
Central Bank Gold Purchases
Central banks purchased a net 289 tonnes of gold during Q2 2026, compared with a revised 57 tonnes in the first quarter.
World Gold Council Outlook
The World Gold Council expects gold to retain a mild positive bias towards year-end with limited scope for major rallies or prolonged sell-offs.
Geopolitical Uncertainty Impact
Escalating West Asian tensions have limited gold's support as higher oil prices reinforce inflation, yields and interest-rate expectations.
Gold's Price Trajectory
Gold may remain range-bound with intermittent volatility as US Treasury yields and the dollar are key triggers for its next major directional move.
What Happens Next
A sustained decline in bond yields or a clear shift towards easier US monetary policy may be necessary to trigger another major rally for gold.
The takeaway
Higher US Treasury yields and a stronger dollar reduce gold's appeal as central banks continue buying.
