Gold has so far managed the stress test from higher yields and a stronger dollar remarkably well, trading down around 2% on the week without challenging key support levels. Meanwhile, ETF holdings have continued to rise and are now approaching the February peak, when gold was trading roughly USD 1,000 higher.

This resilience supports our view that while higher yields remain a near-term headwind for gold, they may simultaneously increase its longer-term appeal. Persistently elevated borrowing costs add pressure on governments, companies and other leveraged parts of the financial system, raising concerns about debt sustainability and financial stability. That may help explain why investors continue to seek protection through gold as an asset that sits outside the traditional financial system.