Gold: Upside capped by real yields – UOB
According to UOB Global Economics & Markets Research, Gold spot eased to close at $4,157 per ounce after earlier trading as high as $4,219. Elevated real yields continue to limit bullion’s upside, leaving Gold softer despite broader macro uncertainty and strong moves in other commodities. The report underscores how higher US yields are constraining precious metals.
UOB Global Economics & Markets Research indicates that gold prices have been constrained by elevated real yields, preventing the precious metal from reaching higher levels. Despite broader macroeconomic uncertainty and strong performances in other commodities, gold closed 0.6% lower at $4,157 per ounce after initially reaching $4,219.
The report suggests that higher US yields are limiting the upside potential of gold. US headline PCE rose 0.3% month-over-month in August, matching analysts' expectations, while the year-over-year rate decreased to 3.4% from 3.7% in the previous month. The slight improvement in US inflation data failed to significantly impact the inflation narrative.
The US Dollar's strength, driven by oil price volatility and geopolitical tensions, continues to pressure gold prices, making it difficult for the metal to capitalize on a modest intraday rise to the $4,200 range.
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