Gold futures finished modestly higher on Wednesday despite a rise in Treasury yields after the U.S. Treasury Department said it will buy back $6B of longer-term debt this week, less than some in the market expected.
The dollar weakened, however, which tends to support gold, and an easing in Japanese yields and continued central bank buying—including from China’s central bank, which added 20 tons in August—also helped support prices, analysts said.
The dollar hovered near a two-week low, while the benchmark U.S. 10-year Treasury yield climbed to its highest level since November 2023 before pulling back.
The precious metals market is also focusing on this week’s inflation data, as producer prices are due Thursday and consumer prices on Friday.
Mounting fiscal concerns, elevated inflation, geopolitical uncertainty, and strong sovereign demand still make a significant gold allocation a must-have in investor portfolios, UBS analysts said in a report this week.
“Pressure from higher real yields and a stronger U.S. dollar is likely to remain a near-term headwind for gold. But just as we do not believe near-term Fed decisions undermine the medium-term outlook for global equities—which is supported by AI spending, resilient economic activity, and broad earnings growth—we do not think they diminish gold’s strategic role in a portfolio,” UBS wrote.
On Wednesday, front-month Comex gold 
XAUUSD added 0.5% to $4,416.00/oz, snapping a two-day losing streak, and front-month Nymex September silver 
XAGUSD jumped 2.5% to $67.942/oz.
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