Gold prices are poised to end the week up by over 2.79%, with a rally of $90 due to a weaker US Dollar influenced by global trade uncertainties. XAU/USD is trading at $3,326, with markets remaining closed for the Easter weekend.
Gold prices dropped after reaching an all-time high of $3,358 as traders took profits. Wednesday’s statement by the Fed Chair tempered the metal’s advance, although concerns over US trade policies and geopolitical risks could support prices.
US Yields and Gold Prices
US yields rose, with the 10-year Treasury note yield up five basis points to 4.333%. US real yields increased similarly, presenting a challenge for Gold prices.
The next week will feature various US economic events, including several Fed speeches and economic data releases. Gold’s upward trend persists despite recent declines, with the RSI indicating an overbought condition.
Initial support for Gold lies at $3,300, with further support at $3,229. A rise above $3,350 could lead to testing the YTD high, with a target of $3,400.
Central banks are major holders of Gold, with holdings rising substantially last year. Gold is often a hedge against economic uncertainty and currency depreciation, inversely correlated with the US Dollar and US Treasuries.
The price of gold climbed more than 2.79% this week, fuelled by a broadly weaker US Dollar and persistent worries about trade tensions globally. Most of the gains came from a $90 rally before markets closed for the Easter weekend, leaving XAU/USD near $3,326. That said, prices did retreat slightly after touching a record high of $3,358, largely due to profit-taking. Comments from Powell mid-week managed to put a lid on further bullish momentum, but lingering concerns around US trade policy, alongside pockets of geopolitical tension, continue to lend some support underneath.
Meanwhile, US Treasury yields moved higher, with the 10-year note advancing five basis points to 4.333%. Real yields essentially mirrored that shift, which presents a stiffer backdrop for non-yielding assets such as gold. As we all know too well, elevated real returns tend to erode gold’s appeal, given the lack of interest income it offers in contrast to government paper.
Technical Analysis and Future Outlook
For those of us following technical cues, the RSI remains above the typical threshold, suggesting that gold is in an overbought state. This doesn’t imply an immediate reversal, but it does mean that current levels might not offer the most attractive risk-reward profile higher up. The levels to watch now are quite clear. Immediate backing is seen around $3,300; if that breaks, the next cushion lies closer to $3,229. On the upside, a breach of $3,350 could reopen the path to this year’s peak, laying out a reasonable case for a push as high as $3,400.
Looking ahead to the coming days, we’re expecting a range of US data points and a round of Fed speakers that will need to be weighed carefully. Their tone could either reinforce current yield trends or adjust them, which would, in turn, shape gold’s next move. Despite the recent dip from the top, the broader bias arguably leans to the upside, underpinned by nervousness tied to macro uncertainty and interest rate expectations.
We should also pay attention to persistent demand from central banks. Their accumulation continued strongly last year, showing no clear desire to slow. This layer of demand continues to help underpin long-term support, especially in times where the Dollar wobbles or when inflation concerns flare.
The inverse moves between gold, Treasury yields, and the Dollar remain intact. When the greenback stumbles, as it did earlier this week, gold often reacts positively—an observation we can’t ignore. With major commodities and macro drivers in flux, watching these relationships in real-time remains essential for short-term positioning.
In this type of environment, the bias should lean towards staying nimble. Reactivity to data, comments from officials, and sudden market shifts is what will likely dictate the best entry and exit points, more so than relying on any single driver.
