Gold, Bond Yield, US Dollar Technical Analysis Amid Geopolitical and Economic Factors

Gold (XAU) consolidates around $2,625 region, weighed down by mixed factors. Geopolitical uncertainties, such as Trump’s tariff threats on Canada, Mexico, and China, typically boost gold prices. However, optimism around a ceasefire between Israel and Hezbollah has reduced its appeal as a safe-haven asset. Moreover, the US Federal Reserve’s indication of maintaining restrictive interest rates amid persistent inflation has further strengthened the US Dollar. The stronger US economic data, including higher-than-expected consumer confidence, also supports the US dollar and pressures gold.

Moreover, US Treasury yields experienced the sharpest decline since August but remain elevated due to expectations of a less dovish Federal Reserve. Rising yields typically strengthen the US dollar by attracting more investment, indirectly weighing on gold prices. The US dollar index consolidates near its resistance, benefiting from Trump’s trade policies and stronger economic performance. Optimism surrounding Scott Bessent’s nomination as Treasury Secretary has further boosted risk appetite. This shift in sentiment has led investors away from gold. However, gold’s downside remains limited by ongoing concerns about the Ukraine-Russia conflict, which supports its safe-haven demand. Upcoming US economic data, including Durable Goods Orders, Employment Claims, and the PCE Price Index, could provide further direction for gold and the US dollar in the coming days.

Gold (XAU) Technical Analysis

Gold Daily Chart – Ascending Channel

The daily chart for gold shows that the price is consolidating after forming a peak near the resistance of an ascending broadening wedge pattern. The anticipated rebound from the $2,560 support level within the pattern was realized during this correction. However, the price declined again on Monday, influenced by easing geopolitical tensions in the Middle East.

Additionally, gold prices may exhibit volatility this week due to reduced trading activity during the Thanksgiving holiday. The 100-day SMA continues to act as a support level. It aligns with the lower boundary of the ascending broadening wedge pattern. A decisive break below $2,540 could open the door for further declines, potentially driving gold prices toward the ascending channel’s support zone, between $2,460 and $2,430.

Gold 4-Hour Chart – Consolidation

The 4-hour chart for gold indicates that the price found support at the $2,560 and $2,546 levels, triggering a strong rebound. However, the price failed to break above the $2,720 resistance level and has since started to correct lower. The overall trend remains upward if the price stays above $2,546.

The decline on Monday has led to a period of price consolidation, suggesting the market is pausing before its next significant move. Traders should watch for a break of $2,720 to confirm the upward move.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Correction

The US Treasury yield has encountered strong resistance at 4.47% at the one-year trendline of 4.47% and started to correct lower. The 50-day SMA remains below the 200-day SMA, but the 50-day SMA is trending upward as the Treasury yield consolidates at higher levels.

The RSI rebounds from its mid-level, which indicates a potential for a further rebound in Treasury yields. A decisive break above the 4.47% resistance level could trigger a strong upward move.

10-Year Treasury Note Yield 4-Hour Chart –Ascending Channel Pattern

The 4-hour chart indicates that since the RSI on the daily chart reached the mid-level, the 4-hour chart shows support from the ascending channel. The likelihood of an upward move remains strong as long as the US Treasury yield stays above 3.90%.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Consolidation at Resistance

The daily chart for the US dollar index shows it consolidates near the strong resistance level of 107. Since the US Treasury yield is also consolidating at its one-year resistance level of 4.47%, the US dollar index remains within its one-year range at 107.

The 50-day SMA is approaching a potential crossover with the 200-day SMA, suggesting that the index may find support during any upcoming correction. If the index moves lower, this support could set the stage for the next significant upward move.

US Dollar 4-Hour Chart – Ascending Channel

The 4-hour chart also shows the consolidation in the US Dollar Index. The index is trading within an ascending channel and is currently near the resistance of this channel. A breakout above 108.70 could trigger a solid upward move, signaling a shift from the current range-bound trading.