Gold rises to $4,349.71 as UOB sees $5,000 by early 2027

COMEX gold edged higher in early Asian trade Monday, recovering some ground after last week's sharp decline, as United Overseas Bank reiterated a long-term bullish outlook despite near-term headwinds from rising Treasury yields and elevated energy prices.

Spot gold rose 0.5 percent to $4,349.71 per ounce by 0034 GMT, according to exchange data. The yellow metal had fallen about 3 percent on Friday to its lowest level since March 24 after a stronger-than-expected U.S. jobs report reinforced bets for interest rate hikes. U.S. gold futures for August delivery were down 0.5 percent at $4,345.60.

"Further consolidation in gold prices could be necessary as investors weigh higher opportunity costs from the high-yield environment," UOB's research team said in its third-quarter outlook report. The bank projects gold at $4,600 an ounce in the third quarter and $4,800 an ounce in the fourth quarter, before rising to $5,000 an ounce in the first quarter of next year.

The U.S. economy posted a third straight month of strong job gains in May, confirming the labor market was gaining traction after stumbling last year and giving the Federal Reserve more room to keep rates steady amid rising inflation tied to the Iran conflict. Cleveland Fed President Beth Hammack said Friday that the new jobs numbers show the labor market was roughly in balance and near full employment, while continued high inflation may require the Fed to raise rates soon. Markets are pricing in a 72 percent probability of a rate hike by December, according to CME Group's FedWatch tool.

Treasury Yields and Geopolitical Risks Cap Near-Term Upside

The yield on the benchmark 10-year U.S. Treasury note rose to a two-week high in the prior session, increasing the opportunity cost of holding non-yielding bullion. Oil prices added more than $2 a barrel Monday after renewed hostilities between Israel and Iran, deepening inflation concerns that could accelerate the timeline for rate increases.

Gold at $4,349.71 is about 13 percent below the all-time high above $5,000 reached earlier this year and roughly 7 percent below UOB's year-end target of $4,800. The metal has drawn support from sustained central bank buying, with the People's Bank of China increasing its gold reserves for a 19th consecutive month in May to 74.96 million fine troy ounces, according to data released Sunday.

Gold speculators on COMEX raised net long positions by 14,409 contracts to 111,341 in the week to June 2, exchange data shows, signaling that professional traders remain positioned for higher prices despite the recent pullback.

Among other precious metals, spot silver fell 0.4 percent to $67.52 per ounce, platinum lost 0.2 percent to $1,773.69, and palladium rose 0.5 percent to $1,231.51.

This article is for informational purposes only and does not constitute investment advice.