Gold strengthens amid declining dollar and US Treasury yields

According to Reuters, gold is gaining ground as the US dollar weakens and Treasury yields decline. Meanwhile, market participants continue to monitor the unstable situation in the Middle East.

On Wednesday, the price of the yellow metal rose by 0.2% after hitting a more than two-week low on Tuesday. The dollar index is at a weekly low, making gold more attractive to holders of other currencies. The yield on 10-year US Treasury bonds remains at its minimum level in over a month.

Further dollar weakness and renewed focus on the US fiscal deficit and tariff policy could boost gold's rally, says Kelvin Wong, senior analyst at OANDA.

As reported by Reuters, traders are anticipating a 60 basis point rate cut by the Federal Reserve in 2025, with the first move expected in September. Lower borrowing costs typically support precious metal prices.

According to a survey of 75 central banks conducted by OMFIF, one in three regulators plans to increase their gold reserves over the next 1–2 years, marking the highest level in the past five years.