Gold prices moved modestly higher on Wednesday as weakness in the U.S. dollar and a pullback in Treasury yields provided some support ahead of the release of minutes from the Federal Reserve’s latest policy meeting.
At 05:42 ET (09:42 GMT), spot gold gained 0.6% to $4,360.82 an ounce, while gold futures slipped 0.1% to $4,414.30 an ounce.
The precious metal has found it difficult to build on its recent rebound as elevated bond yields and rising oil prices continue to create headwinds. Gold recently recovered above the important $4,000-per-ounce level, helped by renewed investor interest and stronger central-bank purchases, particularly from China.
“$4,400 is working like a magnet for the price of gold. Given the ongoing consolidation around this level, the question is if this proves to be ceiling for further gains which raises the likelihood of a retest of $4,000,” said David Morrison, Senior Market Analyst at Trade Nation, in a note.
Elevated Treasury Yields Remain a Challenge for Gold
The yield on 30-year U.S. Treasuries briefly climbed to its highest level in almost two decades on Tuesday, while the 10-year yield remained close to levels not seen since early 2025.
Higher government bond yields typically create a less favourable environment for gold because fixed-income securities become more attractive as their returns increase. Since bullion does not generate interest, rising yields increase the opportunity cost of holding the precious metal and can encourage investors to allocate more capital towards bonds.
Wednesday’s easing in yields therefore offered some relief, although borrowing costs remain high enough to restrict gold’s upside momentum.
Higher Oil Prices Add to Inflation Concerns
Rising crude prices are another factor complicating the outlook for bullion as the Middle East standoff continues.
Higher energy costs can feed into broader inflation, potentially giving the Federal Reserve less scope to reduce interest rates and increasing the possibility that borrowing costs remain elevated for longer.
Much of the uncertainty surrounding oil remains linked to the Strait of Hormuz. Before the Iran war began in late February, approximately one-fifth of global oil and liquefied natural gas flows passed through the waterway, meaning any prolonged disruption could have substantial consequences for energy prices and inflation.
U.S. President Donald Trump said on Tuesday that no negotiations with Iran were taking place, leaving uncertainty over the future management of the strait. A ceasefire framework agreed by Washington and Tehran in June has also expired without an extension being announced.
Fed Minutes and Jackson Hole Move Into Focus
Investors are now awaiting the minutes from the Federal Reserve’s July meeting, due later on Wednesday, for further indications of how policymakers assessed inflation risks and the appropriate direction for interest rates.
Attention will subsequently turn to Fed Chair Kevin Warsh’s appearance at the Jackson Hole symposium next week, where markets will look for further clues about the central bank’s policy outlook.
The U.S. dollar also provided some support for bullion. The U.S. dollar index, which measures the greenback against a basket of major currencies, declined 0.2% to 99.313.
A weaker dollar generally makes dollar-denominated gold less expensive for buyers using other currencies, potentially supporting international demand for the precious metal.