Truist upgrades gold to "neutral" as real yields stabilize, dollar weakens

Truist upgraded gold to "neutral" from "less attractive," citing stabilizing real interest rates, continued central bank demand and a weaker U.S. dollar.

Real Treasury yields have stopped rising in recent weeks, removing a key headwind for gold, Truist analysts led by Keith Lerner said. Yields are likely to face further downward pressure after the U.S. Treasury recently doubled buyback sizes for long-duration debt, he added.

Gold's technical outlook has also improved after the metal reclaimed its 200-day moving average, a sign that downside momentum has eased.

Recent data show central banks continue to add to their gold holdings, providing an important source of support for bullion despite concerns that purchases could slow. The dollar has retreated from recent highs amid softer U.S. economic data, including cooling inflation, weaker payroll growth and a dovish Federal Reserve pause, a backdrop that has historically supported gold prices.

"With gold still about 15% below its recent highs, the evidence now supports a more balanced view," the analysts said.