Why gold prices could keep rising despite high US yields and interest rates
Gold is forecast to hit as high as US$5,400 an ounce in 2027.
Gold prices are anticipated to continue their upward trajectory into 2027, even with elevated U.S. interest rates and fluctuating bond yields, due to central bank purchases and worries over U.S. government debt, according to analysts. Gold experienced a volatile year, peaking at $5,594.82 per ounce in early January before dropping to around $3,942 in June, before rebounding to approximately $4,360 as of September 21.
Though higher interest rates and bond yields generally exert downward pressure on gold, analysts expect prices to persist in rising, with some projecting a peak of $5,400 an ounce in the third quarter of next year. Zavier Wong, a market analyst at eToro, explained that the rise in U.S. Treasury yields is driven by concerns about the U.S. government's debt, which encourages investors to seek gold as an alternative to interest-bearing assets.
Central banks are also increasing their gold holdings to safeguard against financial crises and currency risks, with global purchases reaching nearly double the average before 2022. The upcoming Q3 2026 purchases by central banks will be a crucial indicator for gold prices, as weaker-than-expected purchases could signal the end of the central bank bid supporting gold prices.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
