Gold prices pulled back from recent highs on Thursday, as rising Treasury yields and a stronger dollar reduced the appeal of the precious metal. Spot gold fell by 1%, while US gold futures settled lower.
The inverse relationship between gold and yields is a key driver of the market. When yields rise, the opportunity cost of holding non-yielding assets like gold increases, making it less attractive to investors. The recent uptick in yields reflects expectations that the Federal Reserve will keep interest rates higher for longer.
Despite the pullback, gold remains well-supported by strong demand from central banks and physical buyers in Asia. The metal has also benefited from its safe-haven status amid ongoing geopolitical uncertainty and concerns about the global economic outlook.
Analysts suggest that the long-term trend for gold remains positive, but short-term volatility is likely to persist. Investors will be watching upcoming inflation data and Fed commentary for directional clues. A break below key support levels could trigger further selling, while a rebound above resistance would signal renewed bullish momentum.