Gold rebounded above $4,350 an ounce in Asian trading on Wednesday, recovering from a sharp sell-off as a pullback in US Treasury yields and a softer dollar offered support ahead of the Federal Reserve’s July meeting minutes.
Spot gold had slid nearly 2% on Tuesday, but steadied as the benchmark 10-year Treasury yield eased toward 4.70% and the 30-year yield backed away from levels near a 19-year high. The US dollar index also retreated, making bullion cheaper for holders of other currencies.
The Federal Reserve kept its benchmark rate at 3.5% to 3.75% at its July 28-29 meeting, though three policymakers dissented in favor of an increase. That split gives the minutes added importance. CME FedWatch pricing indicates a September hold remains the more likely outcome, with futures showing roughly a two-thirds probability that rates stay unchanged.
Analysts see softer rate expectations as supportive for gold. OANDA senior market analyst Kelvin Wong said lower borrowing costs reduce the opportunity cost of holding non-yielding assets. FXTM market research head Lukman Otunuga said a sustained move above $4,390 could clear the way toward $4,505, while a break below $4,300 could bring support near $4,200 and $4,150 into focus.
Geopolitical risks remain part of the inflation picture. President Donald Trump said the US was not holding talks with Iran and maintained the Strait of Hormuz was open, while Tehran disputed that account. Brent crude traded above $90 a barrel, keeping energy-driven inflation concerns alive. Silver traded near $63 an ounce, platinum gained and palladium was little changed.
Broader institutional demand remains constructive. The World Gold Council reported central banks added 228 tonnes of gold in the first quarter of 2024, underscoring sustained official-sector appetite. Gold remains below its January record but has recovered strongly during August as softer US data and reduced rate-hike expectations encouraged investors to return to the metal.
