Gold prices continued to be under pressure over the weekend as US government bond yields and global oil prices surged in tandem, changing investor sentiment towards safe-haven assets.
XAUUSD fell near $4,500 after investors began reducing gold holdings following the rise in US 10-year bond yields that exceeded 4.55%, the highest level since May 2025.
The rise in bond yields came after several US economic data showed that inflationary pressures had not subsided. The latest CPI and PPI data both recorded higher readings than market expectations, while annual PPI was reported to have increased around 6%, the highest since 2022.
The development caused the market to start reducing expectations of an interest rate cut by the Federal Reserve this year. Some investors now see the possibility of the Fed keeping rates high for longer or reconsidering a rate hike if inflation continues to rise.
In a situation of high bond yields, gold becomes less attractive because the precious metal does not offer the same yield as government bonds.
Oil & US Dollar Continue to Expensive
At the same time, rising oil prices have also worsened sentiment towards gold. Brent is now trading above USD109 per barrel while WTI is around USD105 after concerns of oil supply disruptions in the Middle East increased.
High oil prices are seen as potentially maintaining global inflationary pressures for a longer period. This situation has prompted investors to seek higher returns on holding government bonds, including in the United States, Japan and the United Kingdom which also saw bond yields rise this week.
The US dollar also strengthened again as the Dollar Index recorded its biggest weekly gain in two months. A stronger dollar usually puts additional pressure on gold as the metal becomes more expensive for holders of other currencies.
Market sentiment was also affected by disappointment over the meeting between Donald Trump and Xi Jinping that failed to produce major developments on trade and geopolitical issues as investors had previously hoped.
Important Support at $4500
From a technical perspective, gold is currently in a bearish correction phase after failing to hold above the resistance zone around $4,660.
The price has also broken several short-term support levels including the 10-day moving average and the flat trading zone last week.
The $4,500 level is now a key support for the market. If the zone is broken, the price has the potential to move to the $4,400 to $4,350 area which is seen as a key technical area.
As long as gold remains below $4,660, selling pressure is expected to continue to dominate the market for the week ahead.
