Gold (XAU) Daily Forecast: Will Rising Treasury Yields Cap Gold’s Uptrend?

Market Overview

Gold prices (XAU/USD) are off to a solid start this week, rising to $2,740 despite pressure from a stronger U.S. dollar and rising Treasury yields.

These factors reflect market expectations for limited rate cuts by the Federal Reserve, shifting demand away from safe-haven assets.

Investor sentiment currently favors the dollar, driven by resilience in the U.S. economy and speculation around a mild easing of monetary policy in the coming months.

Economic Data and Treasury Yields Boost Dollar Appeal

The dollar’s recent strength is supported by rising Treasury yields, with the 10-year note climbing above 4.2%. According to the CME Group’s FedWatch Tool, traders are pricing in a 25-basis-point rate cut at the Fed’s November meeting, a shift from prior expectations of more aggressive easing.

Additionally, economic data has reinforced this stance: September’s Durable Goods Orders saw a modest decline of 0.8%, less than expected, while orders excluding transportation rose by 0.4%.

The University of Michigan’s Consumer Sentiment Index hit a six-month high of 70.5 in October, suggesting stable consumer confidence amid challenging economic conditions.

“Higher yields are diminishing gold’s appeal,” notes Tim Waterer, chief market analyst at KCM Trade, emphasizing that investors are favoring the dollar as it gains strength from resilient U.S. economic fundamentals.

Market Caution Over U.S. Election and Middle Eastern Tensions

While the dollar continues to surge, ongoing geopolitical tensions and the upcoming U.S. election are adding a layer of support to gold prices, with many investors keeping a close eye on these factors for potential shifts.

Concerns over global political risks, coupled with caution around U.S. economic data releases this week—including the Q3 GDP, the PCE Price Index, and the Nonfarm Payrolls (NFP) report—are keeping some traders from taking strong stances on gold.

In summary, gold prices are under pressure from a stronger dollar and rising yields, though potential geopolitical risks and key U.S. economic data this week may still provide some support to the safe-haven metal.

Short-Term Forecast

Gold prices may face resistance around $2,747 due to a stronger dollar and higher Treasury yields, but geopolitical tensions could offer short-term support.

Gold Prices Forecast: Technical Analysis

Gold prices are trading slightly up at $2,743.06, showing a mild 0.15% increase. Currently, a key pivot point at $2,731.20 is serving as a critical support level, reinforced by the upward trendline in a symmetrical triangle pattern.

Staying above this pivot suggests a bullish trend could persist, with immediate resistance at $2,747.60. If prices push through, the next levels to watch are $2,757.81 and $2,766.51.

Conversely, a break below $2,731.20 might prompt a sharper decline, with support at $2,722.44 and $2,712.42. The 50-day EMA at $2,730.16 provides additional short-term support, while the 200-day EMA at $2,689.35 underscores a solid base for gold’s bullish stance.