Gold is holding above $4,000 an ounce even as the 10-year Treasury yield hit its highest since 2002, a sign that the metal's post-2022 demand premium has become structurally entrenched. Analysts say central-bank reserve diversification and geopolitical hedging now drive the price more than real yields and the dollar, and they expect further gains once the Federal Reserve's tightening cycle ends.
Gold's resilience above $4,000 an ounce despite soaring Treasury yields suggests the metal's post-2022 demand premium has become more durable than many expected. That resilience sets the stage for further gains once the Federal Reserve's tightening cycle ends.
Historically, gold moved opposite to real yields, and from 2000 until Russia's 2022 invasion of Ukraine, interest rates and the dollar explained most of bullion's price. That link changed after Western sanctions froze roughly half of Russia's official reserves, prompting central banks, particularly in emerging markets, to accelerate efforts to diversify away from dollar assets.
A premium that keeps widening
Nicky Shiels, metals strategist at MKS PAMP, said the real-yield framework still anchors fair value, but since 2022 a persistent, structurally higher premium driven by reserve diversification and geopolitical hedging has become the dominant driver that macro factors no longer capture. According to Shiels: "it is not fading"
Shiels estimates this debasement and de-dollarisation premium has risen from about $120 an ounce before 2022 to an average of more than $1,000 since then, and it currently stands at roughly $840 an ounce. Gold has been on a four-year roller-coaster, surging to a record $5,595 in January before energy-driven inflation from the Iran war dragged it back to around $4,161.
Yields climb, gold holds its ground
The 10-year US Treasury yield rose to its highest since 2002 on Thursday, having posted its biggest quarterly rise this century in the third quarter. Amy Gower, commodities strategist at Morgan Stanley, said that for a non-yielding asset, all else equal, competing against that yield level in portfolios is challenging.
However, gold holding above $4,000 despite yields that high signals demand beyond what yield levels alone would suggest, Gower added. Jay Tatum, portfolio manager at Valent Asset Management, described the temporary headwinds for gold as enormous and said that in almost any other environment they would probably have pushed prices significantly lower. Prices have held, he said, because the underlying factors are strong.
In recent years, gold has tended to rally when long-term Treasury yields rise faster than short-term yields, reflecting growing concerns about government debt, according to Morgan Stanley. On Thursday, gold rose 0.2% despite a stronger dollar, while higher oil prices and a surge in bond sales to fund AI investments pushed yields higher.
Demand signals beyond the trade data
Top bullion consumer China imported 1,077 metric tons of gold in the first eight months of 2026, putting this year's annualised imports on track for the highest in 11 years. Gower said some of that is going to PBOC holdings, but a lot of it isn't, suggesting demand elsewhere in the country.
Poland's central bank has also continued to add to its reserves, with purchases running ahead of last year's pace. Analysts say bullion is also likely to be boosted by additional Western investment demand once the rate-tightening cycle ends, which would likely show up in rate-sensitive gold-backed ETF holdings that are already near record highs.
Source: Investing.com
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