Gold (XAU/USD) is facing renewed pressure after failing to sustain gains above the key $4,000 psychological mark. The precious metal’s recovery from weekly lows near $3,900 has stalled, weighed down by higher US Treasury yields and a stronger US Dollar, as traders scale back expectations for further Federal Reserve rate cuts this year.
Fed Outlook and Stronger Dollar Weigh on Gold
Gold briefly advanced on Thursday amid a bout of risk aversion, as Wall Street reversed earlier gains on renewed valuation concerns in the AI sector. However, the move lacked follow-through, with prices capped near $4,030, the upper boundary of this week’s trading range.
The US Dollar and Treasury yields rebounded strongly after Fed Chair Jerome Powell confirmed a widely expected 25 basis-point rate cut, while emphasizing that additional easing in December is not guaranteed.
According to the CME FedWatch Tool, the probability of another rate cut in December has fallen to 64%, down from 91% before the meeting. Meanwhile, the 10-year Treasury yield surged over 30 basis points since last Wednesday, climbing back above 4.10%, limiting gold’s upside momentum.
Technical Outlook: Resistance Capped at $4,030–$4,040
Gold’s short-term technical setup remains neutral-to-bearish. The metal is attempting to recover from Thursday’s $3,920 low, but continues to face heavy resistance in the $4,030–$4,040 zone (October 29–30 highs).
Failure to confirm a breakout above this level keeps $3,900 (October 28–30 lows) exposed as near-term support. Below that, a drop under $3,890 could open the door toward the October 2 low at $3,820, with the next downside target seen at $3,795, the A-B=C-D retracement projection from the $4,380 all-time high.
On the flip side, a decisive close above $4,040 would relieve immediate bearish pressure and shift focus toward $4,150 (October 23 high), followed by $4,220 (October 20 support-turned-resistance).
Technical indicators offer mixed signals — the 4-hour RSI hovers near 50, reflecting indecision, while the MACD shows only weak bullish momentum.
Summary
Gold remains trapped between rising US yields and safe-haven demand, struggling to find direction above $4,000. Unless bulls can secure a daily close beyond $4,040, the risk of another pullback toward $3,900 persists.
