"Gold prices are entering a corrective phase after a strong rally, as the market shifts its focus from safe-haven demand to inflation risks and interest-rate expectations."
"The biggest pressure on gold currently comes from U.S. Treasury yields. As the 10-year yield climbed into the 4.5-4.6% range, its highest level since early 2025, the opportunity cost of holding gold also increased. This is one of the key reasons why buying interest in gold has remained limited, even though global risk conditions remain highly uncertain."
"Geopolitical risks in the Middle East continue to play a two-sided role for gold. On the one hand, tensions related to Iran and key energy regions continue to support defensive demand. On the other hand, if these tensions continue to push oil prices higher, markets may become more concerned that inflation will remain elevated for longer, increasing the likelihood that central banks will maintain a tighter policy stance."
"However, the medium-term outlook for gold has not turned completely negative. ETF inflows and central bank gold purchases remain important sources of support. According to the World Gold Council, central banks bought a net 244 tonnes of gold in the first quarter of 2026, up 3% year-on-year, while global gold ETFs recorded net inflows equivalent to 62 tonnes of gold."
Gold prices are entering a corrective phase after a strong rally as market attention shifts from safe-haven demand toward inflation risks and interest-rate expectations. Gold briefly recovered toward nearly USD 4,600/oz when the U.S. dollar weakened, but gains were capped as U.S. Treasury yields and oil prices continued to rise. The main headwind is higher Treasury yields, which increases the opportunity cost of holding gold and reduces buying interest even amid uncertain global risk conditions. Middle East geopolitical tensions support defensive demand, but higher oil prices can also raise concerns about prolonged inflation and tighter central bank policy. Medium-term support remains from central bank purchases and gold ETF inflows, including net central bank buying of 244 tonnes in Q1 2026 and net ETF inflows equivalent to 62 tonnes.
#gold-prices #us-treasury-yields #inflation-expectations #geopolitical-risk #gold-etfs-and-central-bank-demand
Read at London Business News | Londonlovesbusiness.com
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