- XAU/USD erases previous gains and returns to $4,030 after hitting fresh three-month lows at $3,986
- The sharp decline in US Treasury yields and dwindling hopes of Fed tightening provide some support to precious metals.
- Oil prices, at multi-month highs, are capping Gold’s recovery attempts.
Gold (XAU/USD) is practically flat on the daily chart, just below $4,030 on Friday after bouncing up from 3-month lows in the $4,000 area. Precious metals are drawing some support from the sharp decline in US Treasury yields, but upside attempts remain limited, as Oil prices jumped to fresh highs, forcing global central banks to adopt more restrictive monetary policies.
The yield for the benchmark US 10-year note dropped 15 basis points on Thursday on its sharpest daily decline since 2023, as growing concerns about an AI bubble have triggered a rush for safety into US Government yields.
With this move, long-term Treasury yields head for a three-week decline, which eases pressure on the Federal Reserve (Fed), providing some leeway to the Federal Reserve (Fed) to assess the economic impact of September’s rate hike, and increasing the appeal of yieldless precious metals.
Oil prices, on the other hand, are likely to remain a strong headwind for any significant Gold recovery. Brent Oil has reached fresh five-month highs above $110 while the US benchmark WTI barrel escalated above the $100 level earlier on the day.
Technical Analysis: Bulls will find resistance at the $4,070 area
XAU/USD trades at $4,024.42, extending with price action contained within a bearish channel from the early September high. The Relative Strength Index (RSI), however, has reached heavily oversold levels on the 4-hour chart, which suggests that bears might be exhausted and that some bullish correction should be considered.
On the topside, bulls are likely to meet resistance at the previous support area of $4,070 ahead of Tuesday’s and Wednesday’s high, near $4,150, and the area between $4,200 and $4,220, which has capped rallies several times in October.
Below the $4,000 area, bears are likely to face strong support at the year-to-date lows between $3,960 and $3,941. Further down, the channel bottom lies now around $3,925.
- Euro: Gradual upside as Fed and ECB converge .
- Gold Price Forecast: XAU/USD picks up from the $4,000 area with bears still in control
- Gold holds above $4,000/three-month low as Fed hike bets and firm USD cap upside
- Euro: Weakens against US Dollar amid risk concerns.
- Gold sinks to over two-month low as higher-for-longer interest rate expectations weigh
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