Gold stabilises after weekly decline

"After a week of losses that pushed gold to the lower end of its range over the past few weeks, the metal stabilised to some extent but could remain under pressure."

"The broader environment remains challenging, with expectations for a more restrictive global monetary policy stance continuing to weigh on sentiment. Tensions in the Middle East have kept oil prices elevated, fuelling concerns that inflationary pressures may persist for longer than previously expected."

"This dynamic has continued to support both the US dollar and government bond yields. Benchmark US 10-year Treasury yields have climbed to their highest levels since early 2025, while yields across Europe were also higher as markets increasingly anticipate tighter monetary policy."

"Investment flows have also reflected this cautious backdrop. Gold-backed ETFs have shown only limited investor participation in recent weeks. Weak investment flows could leave gold exposed to more downside risks. Looking ahead, while short-term headwinds remain significant, gold continues to retain constructive long-term drivers."

Gold stabilised after a week of losses that pushed it toward the lower end of its recent range, though it could stay under pressure. Expectations for more restrictive global monetary policy continue to weigh on sentiment. Middle East tensions have kept oil prices elevated, raising concerns that inflation may persist longer than expected. This environment supports the US dollar and government bond yields, with US 10-year Treasury yields reaching their highest levels since early 2025 and European yields also higher. Markets increasingly anticipate tighter policy, reinforcing expectations that borrowing costs may remain elevated. Gold-backed ETF inflows have been limited, leaving bullion exposed to further downside. Long-term support may come from sustained central bank buying, resilient Chinese demand, and ongoing geopolitical tensions in Eastern Europe.

Read at London Business News | Londonlovesbusiness.com