Gold Defies Record Bond Yields but Faces Q4 Headwinds, Invesco Warns

Gold ended the third quarter up 3.7% at $4,157 an ounce, showing resilience even as 10-year and 30-year U.S. Treasury yields hit their highest levels since 2002 at 5.28% and 5.63%. Invesco analysts note that rising real yields increase the opportunity cost of holding gold, yet the historical link has weakened since 2022 due to aggressive central bank buying.

For the fourth quarter, persistent inflation and possible further Fed rate hikes to the 3.75–4.00% range remain key risks. Recent PCE data lowered the odds of an October hike to 21%. Invesco anticipates volatility but highlights support from central banks and renewed interest in gold-backed ETPs.

U.S. national debt surpassed $40 trillion, potentially pushing yields higher. Still, structural demand from central banks and recovering investment flows into physically backed funds should underpin gold over the longer term.