Gold Faces Pressure as 10-Year Yields Near 5% Yet Finds Backing from Debasement Demand

Gold prices encounter near-term challenges from climbing U.S. Treasury yields approaching the key 5% mark amid inflation and fiscal worries that raise the opportunity cost of holding the non-yielding metal. Still, demand tied to currency debasement continues to lend support. LPL Financial Chief Technical Strategist Adam Turnquist observed that the 10-year yield stands at 4.97% and could advance toward 5.25-5.35% following its breakout above 4.70-4.75%. The recent acceleration stems from Middle East tensions lifting oil prices and markets pricing in more hawkish Federal Reserve actions. Turnquist stated, “Higher rates and the hawkish repricing of monetary policy have certainly weighed on gold.” Nevertheless, gold displays resilience as its usual correlation with a stronger dollar weakens, helped by central-bank purchases and renewed ETF inflows.