Gold rises, defying the strength of USD and the rise in US Treasury yields

Gold prices rose on Friday despite pressure from the strength of the dollar and the rise in US Treasury yields, as investors were evaluating the decisions of major central banks to adhere to high interest rates.

Gold rose in spot transactions 0.2 percent to $1,923.29 per ounce by 0350 GMT, after recording the largest daily decline since September 5. US gold futures also increased 0.2 percent to $1,943.10.

Central banks in the world’s largest economies announced their commitment to keeping interest rates high as long as this is necessary to curb inflation.

The dollar stabilized near the highest level in six months amid expectations that interest rates in the United States would remain high for a longer period, while benchmark ten-year Treasury bond yields rose to the highest level in 16 years.

Investors usually buy gold as a hedge in times of economic uncertainty, but high interest rates affect the prices of bullion, which does not generate returns and is priced in dollars.

Markets expect 45 percent that the Federal Reserve (the US central bank) will raise interest rates again before the end of the year.

As for other precious metals, silver rose in spot transactions by 0.4 percent to $23.47 per ounce, and is on track to record its best performance in four weeks.

Platinum increased 0.7 percent to $925.77, and palladium jumped 0.8 percent to $1,272.85.