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Gold Price Forecast: XAU/USD languishes below $4,200 amid high US yields

October 5, 2026

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Gold bounces up from two-month lows but remains within previous ranges, below $4,200.
High US yields and the risk-averse market amid the global bonds’ selloff are buoying the safe-haven USD
XAU/USD bulls need to break the $4,230 resistance area to ease bearish pressure.

Gold (XAU/USD) trims some losses on Monday but remains trapped within previous ranges, with upside attempts limited below $4,200 and with two-month lows of $4,110 at a short distance. The recent pullback on the US Dollar Index (DXY) has provided some support for precious metals although the high US Treasury yields are keeping a floor on US Dollar (USD) dips so far,.

US labour market data disappointed on Friday and cooled hopes of Federal Reserve (Fed) monetary tightening in October. Futures markets are now pricing in an 80% chance that the US central bank will stand pat on rates in October, from 30% a week ago, although hopes of a December hike remain little changed.

The negative impact of a softer monetary tightening path has been offset by the risk-averse market mood amid the global bonds sell-off. The US Dollar is drawing support from Euro weakness as France’s borrowing costs escalate, although some market analysts warn that a debt crisis might also take a toll on the USD.

“Higher yields driven by Fed tightening can support the USD. Higher term premia driven by concerns over debt supply, fiscal sustainability, and Treasury-market credibility need not,” says the DBS Group in a note.

Technical Analysis: Gold remains below key resistance at $4,230

XAU/USD trades at $4,165 keeping the near-term bearsish trend in place, with price action capped below a previous support level at the $4,230 area, which is also the neckline of a bearish Head & Shoulders (H&S) pattern.

Momentum indicators on the 4-hour chart show some bullish divergence, although upside attempts remain frail so far. The Relative Strength Index (14) stays just below the midpoint, while the moderately positive Moving Average Convergence Divergence (MACD) suggests that bullish momentum remains constructive but mild.

Immediate resistance is seen at the mentioned $4,230 area (September 16 low, October 2 high). Above there, the pair might find some resistance at the September 25 high near $4,315, although the next relevant bullish target would be the September 11 and 18 highs, just above $4,500.

On the downside, last week’s floor, near $4,110, is likely to test bears’ confidence. Frther down the late July lows at the $4,000 psychological area, and the year-to-date low around $3,950 will be targeted.