Gold maintained its gains at the end of a turbulent week, primarily due to the Federal Reserve's first interest rate hike since 2023 and a reduction in oil prices, which collectively assuaged fears about inflation. This led to a calming effect on the market, with gold experiencing significant recovery.
Bullion was observed trading around $4,350 an ounce, having seen an almost 2% increase on Thursday. This upward movement largely recouped losses incurred over the preceding three sessions. Concurrently, Treasury yields across all maturities saw a decline after a surge that followed the Fed's unanimous decision on Wednesday to raise rates by a quarter percentage point.
The recovery in Treasury yields was beneficial for gold, as the precious metal typically performs less favorably when bond yields are elevated because it does not offer interest. This shift in yields helped alleviate some of the pressure on gold prices, supporting its recent climb.
