Gold remained under pressure on Wednesday, hovering near multi-week lows, amid a continued focus on inflation risks and the prospect of interest rate hikes.
Prolonged tensions in the Middle East continue to drive energy prices and inflation concerns, which could continue to push global bond yields higher, creating a challenging environment for the precious metal.
US long-term Treasury yields have climbed to multi-year highs, with the 30-year yield reaching levels not seen since 2007, while the 10-year benchmark has also moved higher.
Similar dynamics are visible globally, with European and Japanese yields near highs as markets increasingly price additional monetary policy tightening to contain inflation risks. In this regard, major central banks are expected to raise interest rates in the coming months.
Looking ahead, investors will closely monitor geopolitical developments and the release of the FOMC minutes, both of which could generate short-term volatility. However, gold could find structural support from ongoing central bank purchases, which could help limit downside risk.
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