Gold hovered near USD 4,360 an ounce on Friday after rising almost 2% in the prior session, helped by a pullback in oil that has eased inflation concerns and dragged US Treasury yields lower. Crude has fallen for a third straight session as Saudi Arabia works to restore flows through the East-West pipeline, while attention also turns to Donald Trump\u2019s meeting with Gulf leaders next week. The 10-year Treasury yield slipped to 4.93% after briefly pushing above 5% earlier in the week, giving bullion some near-term support.<\/p>\n\n
Rate expectations remain a headwind after the Federal Reserve delivered its first interest rate increase in three years and indicated further tightening may be required to curb inflation; markets price a roughly 53% chance of another move as soon as October. On the H4 XAU\/USD chart, consolidation formed around 4,304, with a drop to 4,234 followed by a rebound to 4,381, and a fresh decline is now developing towards 4,333; a break could extend losses to 4,215. On the H1 timeframe, price broke above 4,305, reached 4,335, retested 4,305, consolidated, then advanced to 4,381, while MACD and Stochastic readings point to short-term downward momentum.<\/p>\n\n
We suggest derivative traders prepare for a downward turn in gold prices over the coming weeks as the recent rally near $4,360 shows signs of exhaustion. Although falling oil prices and lower 10-year Treasury yields at 4.93% have provided temporary relief, the broader macroeconomic environment remains hostile for non-yielding assets. Historically, when real yields remain elevated near the 5% threshold, gold faces severe upward resistance as capital shifts toward higher-yielding debt.<\/p>\n\n
We recommend watching the $4,333 support level closely on the short-term charts, as a clean break below this point will likely accelerate the bearish momentum. Our technical indicators, including the MACD and Stochastic oscillator, show that the corrective upward move to $4,381 is complete and pointing toward a deeper decline to $4,215. Derivative traders could utilize put options or short futures positions to capitalize on this expected slide.<\/p>\n\n
We must also factor in the 53% market probability of another Federal Reserve interest rate hike as early as next month. High-interest-rate environments historically pressure gold, with data showing that previous Fed tightening cycles have restricted gold’s gains by an average of 4% to 6% in the months immediately following rate increases. This hawkish outlook makes any short-term price spikes an attractive entry point for sellers rather than buyers.<\/p>\n\n
We should closely monitor Donald Trump\u2019s upcoming meeting with Gulf leaders and Saudi Arabia’s pipeline progress, which could push energy prices even lower. While lower energy costs temporarily ease immediate inflation fears, they also reduce gold’s appeal as a traditional inflationary hedge. This dual pressure of rising interest rate expectations and cooling inflation hedges reinforces our bearish outlook for the precious metal in the near term.<\/p>\n\n\n\n