Gold Prices Rise as Oil and Treasury Yields Fall

Gold prices climbed on Friday as declining oil prices and lower U.S. Treasury yields eased inflation concerns, helping the precious metal recover from losses triggered by the Federal Reserve’s latest interest rate hike.

XAU/USD rose 0.5% to $4,361.31 an ounce at 01:28 GMT, while U.S. gold futures were nearly unchanged at $4,399.87. Silver gained 1% to $65.88 an ounce, and platinum advanced 1% to $1,790.41. The U.S. Dollar Index remained broadly steady at 100.22.

Gold has now recovered much of its decline from the previous three sessions after surging nearly 2% on Thursday. The rebound followed a retreat in Treasury yields, which had initially jumped after the Fed unanimously raised interest rates by 25 basis points on Wednesday.

Falling bond yields typically support gold because the metal does not generate interest income, reducing the opportunity cost of holding bullion.

Lower oil prices also improved sentiment toward precious metals. Crude prices declined for a third consecutive session as concerns over Middle East supply disruptions eased. Saudi Arabia expects flows through a key pipeline to resume within days, while some tankers have continued navigating the Strait of Hormuz. Reduced energy-price pressure has helped calm near-term inflation concerns.

However, expectations for additional Federal Reserve rate hikes remain a potential obstacle for gold. Fed Chair Kevin Warsh’s inflation comments have encouraged markets to anticipate at least one more rate increase this year and potentially two additional hikes in 2027.

Despite tighter monetary policy expectations, investor demand for gold remains resilient. Thursday’s rally pushed bullion back above its 100-day moving average, a widely followed technical momentum indicator. Gold, however, remains nearly 20% below levels recorded before the Iran war began in late February.

Gold-backed exchange-traded funds have also attracted billions of dollars in inflows. ANZ reported that ETF holdings increased for eight consecutive sessions, while strong options activity in major gold ETFs suggests investors continue seeking exposure to bullion despite the prospect of higher interest rates.