Gold rises as dollar and bond yields fall

Spot gold rose 0.9% to $4,169.32 per ounce, while US gold futures gained 0.9% to $4,194.40. After hitting a two-month low on Wednesday, the precious metal recovered some of its losses as the dollar paused its rally and the US 10-year Treasury yield declined for a second consecutive session. A weaker dollar made gold more attractive to investors holding other currencies, while lower bond yields boosted demand for the non-yielding metal.

However, uncertainty surrounding the Federal Reserve's interest rate policy continued to weigh on the gold market. St. Louis Fed President Alberto Musalem said additional rate hikes might be necessary to bring inflation back to the 2% target. Markets were pricing in an 18% probability of a rate increase in October and an 82% probability in December. Meanwhile, concerns over potential supply disruptions in the Middle East and rising oil prices could intensify inflationary pressures, although continued gold purchases by central banks may help limit further losses. Other precious metals also advanced, with silver rising 1.1% to $60, platinum gaining 2.2% to $1,670.15, and palladium climbing 2.1% to $1,146.98.