Rising US Treasury yields weigh on gold price at $4,058 resistance

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Gold edges up 0.11% to $4,054

Highlights

Gold continues to sell off, dropping below $4,050 as a stronger US Dollar and higher yields drive demand lower.
Rising yields and persistent inflation are fueling expectations for a more hawkish Federal Reserve, dampening gold’s appeal.
Technical signals remain bearish, with expected trading over the next 2–3 days in the $4,013 to $4,094 range and a 73% probability of further downside.

Fed hawkishness dampens gold demand amid rising yields

Gold has faced renewed selling pressure as it extended its decline below the $4,050 level, driven by a stronger US Dollar and firmer US yields, according to Fxstreet. Higher yields, tied to persistent inflation concerns, have boosted expectations for a more hawkish Federal Reserve stance, reducing the appeal of gold as a non-yielding asset. The interplay between monetary expectations and currency strength is shaping sentiment, with recent developments placing additional downward pressure on gold demand in the current environment.

Bearish momentum persists as intraday signals flag overbought

Technically, gold is currently trading above its MA-20 but remains below the MA-50 and MA-200, signaling short-term support and sustained bearish pressure over the medium and long term. The Ichimoku Kijun sits at $4,058, marking immediate resistance, while the day's price action remains just beneath this level. Downside momentum is reinforced as both MACD and ADX flag ongoing bearish conditions. The RSI stands at 49.34, registering a Sell signal, whereas Stochastic RSI, CCI, and Bull/Bear Power reflect overbought intraday conditions, indicating that buyer momentum may be stretched. Bull/Bear Power points to buyer dominance in the intraday session, though the Awesome Oscillator offers no clear directional bias. Overall, technical indicators point to a market in flux, with intraday price strength countered by broadly negative momentum signals.

Downside risk dominates as price contained within volatility band

In the short term, gold is projected to remain in a typical volatility band between $4,013 and $4,094 over the next 2–3 trading sessions. Scenario probabilities are tilted, with a 27% chance of an upward move and 73% probability favoring further downside. The base case is for price to trade sideways within this range; a sustained rise would require a breakout above immediate resistance at $4,058, while a confirmed drop below $4,013 would likely trigger further losses.

Viktoras Karapetjanc, expert at Traders Union, sees gold under pressure from macro forces as a stronger US Dollar and robust US yields continue to weigh on sentiment. He notes that while short-term support is present above $4,050, medium- and longer-term momentum indicators remain bearish, reflecting prevailing caution. The probability of further downside is high, but Karapetjanc remains attentive to a potential break of immediate resistance at $4,058. In his words: "Gold is facing headwinds from a firm dollar and rising yields, but any sustained move above $4,058 could quickly shift the outlook, so I am watching resistance levels closely for signs of renewed strength."

Earlier, analysts noted that persistent technical barriers and rising US yields were keeping gold prices under sustained bearish pressure. This view is reinforced by current momentum and sentiment indicators, suggesting that traders should closely watch for a confirmed break below $4,013 as the next key risk for further downside.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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