Gold prices turned bearish amid the rise in Treasury yields and the strengthening of the US dollar.
The dollar hit a 10-month high, and the yield on the 10-year Treasury note hit a 16-year high, which negatively impacted the value of dollar-denominated gold. A stronger dollar and higher interest rates reduce the attractiveness of gold as a non-interest-bearing asset.
In this regard, investor attention has shifted to the consumer inflation data due out in early October for clues on the Federal Reserve's next move on interest rates.
Currently, the XAU/USD is down 0.24% at $1,911.76.
It is worth noting that the Federal Reserve's statement about maintaining higher interest rates for an extended period of time has caused the markets to revise their forecasts, which now take into account the possibility of another rate hike in November or December.
In addition, the possibility that the U.S. government will shut down on October 1 if no resolution is reached in the federal budget negotiations is creating additional tension in the financial markets.
Taking into account all the above factors, in the short term, gold is expected to continue its bearish trend, but the release of positive news and economic data may change the vector of the popular asset's movement.
The next support level for gold is at $1,893, and resistance is at $1,947. The breakdown of any of these indicators will indicate a further trend in gold.
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