Gold Hits Two-Week High as Treasury Yields Retreat

Gold prices extended their rally to a third session on Monday, reaching a two-week high as Treasury yields retreated on easing inflation expectations. The precious metal's advance underscores renewed investor interest in safe-haven assets amid shifting macroeconomic sentiment. This rally is part of a broader trend since 2022, where central banks globally have been net buyers of gold, diversifying reserves away from the U.S. dollar. The World Gold Council reported record purchases of over 1,000 tonnes in 2022 and 2023, providing a structural floor under prices. Additionally, real U.S. 10-year yields, which adjust nominal yields for inflation, have declined, reducing the opportunity cost of holding non-yielding gold. The COMEX-LBMA spread, a gauge of physical delivery stress, has remained narrow, indicating orderly market conditions.

The move higher comes as the yield on the benchmark 10-year U.S. Treasury note declined, reducing the opportunity cost of holding gold, which offers no interest. Traders are closely monitoring the Federal Reserve's policy path, with softer inflation data reinforcing bets that the central bank may slow the pace of rate hikes. For gold and precious metals traders, the current environment supports further upside, and they can track real-time price movements on NowPrice's live gold dashboard to capture intraday opportunities. The inverse correlation with the U.S. Dollar Index (DXY) has been a key driver, as a weaker dollar makes gold cheaper for foreign buyers. ETF flows into products like GLD and IAU have been mixed, but physical demand from jewelry and investment sectors in Asia, particularly China and India, remains robust, absorbing supply.

Looking ahead, market participants will focus on upcoming U.S. economic data, including the consumer price index (CPI) and producer price index (PPI) releases, which could provide further clues on inflation trends. A sustained decline in yields and a weaker U.S. dollar would likely provide additional tailwinds for gold. Key technical resistance lies near the $1,850 level, while support holds around $1,800. Traders should also watch for any shifts in COMEX positioning and LBMA clearing volumes, which could signal changes in speculative vs. physical demand dynamics. The interplay between real yields and gold remains critical; if inflation data surprises to the upside, it could reignite rate hike fears and pressure gold, but a continued disinflationary trend would support further gains.