gold prices are experiencing a slight decline as US bond yields show signs of recovery. Although the market is seeing some selling activity, geopolitical tensions and fears of a trade war may help mitigate losses for the precious metal. Investors in the US dollar are currently adopting a wait-and-see approach ahead of the critical Nonfarm Payrolls (NFP) report set for release on Friday.
During the Asian trading session on Thursday, gold (XAU/USD) faced downward pressure but remained within a narrow trading range established over the past week. The Federal Reserve’s recent hawkish statements, including comments from Chair Jerome Powell, reinforced the view that the central bank is likely to maintain a cautious stance on interest rate cuts. This has resulted in a modest rebound in US Treasury yields, which has placed additional pressure on the non-yielding gold .
The ongoing risk-on sentiment in the markets is contributing to the downward trend in gold prices. However, persistent geopolitical issues, particularly the escalating Russia-Ukraine conflict and the upcoming tariffs proposed under the Trump administration, may provide some support for gold . Meanwhile, the lack of substantial buying in the US dollar is expected to limit the commodity’s losses. Many traders are poised to delay significant trades until the NFP report drops.
Technically, the current outlook for gold appears bearish, especially after breaking below a multi-day ascending channel. Despite this, neutral indicators on the daily and four-hour charts suggest caution, advising traders to wait for further confirmation of bearish momentum below the $2,630 support level. A continued decline could see prices testing the $2,622 – 2,621 range and potentially moving towards the key $2,600 level.
On the upside, the $2,655 region is likely to provide immediate resistance, along with the last week’s swing high around $2,666. For gold to regain upward momentum, a breakthrough past the $2,677 – 2,678 resistance area would be necessary, allowing for targets around the notable $2,700 figure. However, any bullish movement is expected to encounter strong resistance near the $2,721 – 2,722 zone, which, if surpassed, could shift market sentiment favorably for gold traders.
