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Spot Gold
(XAU/USD) fell during Tuesday's Asian trading session, trading near $4,160/oz, retreating significantly from a one-week high near $4,217 touched in the previous session.
Gold price came under profit-taking pressure after several consecutive days of rebound,
US Dollar Index
and rising US Treasury yields were the main drags.
The strengthening US dollar is the core factor suppressing gold prices.
US Dollar Index
has recently continued climbing to around an 18-month high, quoted near 101.28, refreshing an 8-week high. The dollar’s strength is supported by the Federal Reserve
consistently releasing hawkish signals. Philadelphia Fed President Anna Paulson and Cleveland Fed President Beth Hammock have both recently emphasized that inflation pressures remain stubborn and the Fed may need to raise rates further. According to the CME FedWatch Tool, market pricing for a 25 basis point rate hike in October has risen to about 67.5%, a sharp increase from a week earlier.
The continuous rise in US Treasury yields further reinforces the opportunity cost of holding gold. The 10-year Treasury yield has climbed near 5.2%, marking the highest since 2007; the 30-year Treasury yield topped 5.5%, the highest since June 2004. As a non-yielding asset, gold’s appeal diminishes in a rising real interest rate environment, which is the core logic behind the current price pressure.
Inflation concerns sparked by the rebound in oil prices also indirectly pressure gold prices. WTIcrude oil is trading around $92,
Brent crude
is approaching $100, with geopolitical risk premiums pushing energy prices higher. Although gold is traditionally seen as an inflation hedge, rising oil prices have boosted expectations for further monetary tightening by central banks, which by pushing up real rates, suppress gold prices. Manav Modi, a commodities analyst at Motilal Oswal Financial Services, stated, “The macro backdrop remains challenging, with persistent inflation pressures making further Fed tightening possible, supporting Treasury yields and maintaining pressure on real rates.”
Nevertheless, strong demand is providing a bottom for gold prices. Gold ETF inflows have reached a four-year high, indicating increased allocation intention by institutional investors. In addition, a major Asian country increased its gold reserves by 740,000 ounces in September, extending its gold buying spree to 23 consecutive months. The global trend of de-dollarization by central banks continues to provide structural support for gold demand.
TD Securities strategists note that commodity trading advisors (CTAs) are covering gold and platinum short positions, amounting to about 7% of the historical largest position, reflecting a restoration of market confidence in precious metal fundamentals. The bank believes that geopolitical risks, fiscal concerns, dollar depreciation, de-dollarization, and stagflation worries remain key factors supporting gold inflows, and forecasts gold could break free from the restraint of real yields, starting a new bull cycle by 2027.
From a technical perspective,
Spot Gold
shows a neutral to weak pattern on the daily chart. Prices are below the middle line of the 20-day Bollinger Band ($4,225) and the 100-day simple moving average ($4,255), with these two lines forming the main resistance above. The 14-day RSI reads around 43.73, in a neutral to weak area, not yet oversold, indicating downside pressure persists but is not extreme. The lower Bollinger Band is near $4,055, serving as key support below; if prices can break above $4,255 with volume, a rally toward the upper Bollinger Band at $4,400 is possible.
On the 4-hour chart, gold prices oscillate between $4,150 and $4,230, with short-term moving averages intertwined, and direction yet undecided. The MACD indicator hovers below the zero axis, with alternating red and green bars reflecting a temporary balance between bulls and bears. If the price can hold above $4,200 and break $4,225 resistance, a short-term rebound may continue; conversely, breaking below $4,150 support may lead to a test of the $4,100 or even $4,055 areas.
Editor’s Summary
Spot Gold
is currently caught in a tug-of-war between “dollar strength suppression” and “demand-driven support.” The Fed’s persistent hawkish stance and US Treasury yields climbing to multi-decade highs exert major pressure on gold prices; but rising Middle East geopolitical risks, continued central bank gold purchases, and CTA short covering are providing bottom support. Technically, the price is trading below key moving averages, RSI is neutral to weak, with a short-term bias toward range-bound movement. Watch if the $4,150 support can hold; if it does, a move toward the $4,225–$4,255 resistance area is possible; if breached, a pullback toward $4,055 is likely. Special attention should be paid to Wednesday’s
September US CPI data, which will be a key guide for the Fed’s rate path and will directly impact short-term gold price direction.
Editor: Guo Jian
