Gold Prices Steady Near $4,140 Amid Rising Treasury Yields

Gold prices held steady near US$4,140 an ounce on October 6, though spot prices dipped 0.1% to $4,134.92 during early trading in Asia. The market is currently balancing a strengthening US dollar, which approached its highest level of 2026 on October 5, and rising Treasury yields against signals from the Federal Reserve.

The United States Federal Reserve has downplayed the likelihood of an imminent rate hike, with traders estimating only a 25% chance of an increase at the October meeting. This comes despite an Institute for Supply Management report showing that US services cost pressures grew at the fastest pace in over four years. The US dollar's strength was further bolstered by a bond sell-off in France that weakened the euro.

Rising 10-year Treasury yields have increased the opportunity cost of holding non-interest-bearing assets like gold. However, analysts suggest gold may benefit if high borrowing costs and insufficient fiscal adjustments erode confidence in government repayment. Gold has experienced significant volatility recently, including a 6% drop in August and a decline of more than 20% since the US-Iran conflict began in late February.