Gold Price Consolidates Amid Rising U.S. Bond Yields and Stronger Dollar Pressure

Gold (XAU/USD) remains under pressure during the first half of Monday’s European session, trading near $2,630, the lower end of its daily range. A rebound in the U.S. Dollar (USD), driven by rising U.S. Treasury yields, has weighed heavily on the precious metal, following the USD’s recent dip to a nearly three-week low.

Market sentiment is also influenced by expectations that U.S. President-elect Donald Trump’s proposed tariffs and expansionary policies could fuel inflation, prompting the Federal Reserve (Fed) to pause further rate cuts. However, lingering trade war concerns, geopolitical tensions, and a cautious risk tone are likely to provide support for the safe-haven XAU/USD, limiting further downside ahead of key U.S. economic data releases this week.

Gold Price Under Pressure as US Dollar Recovers and Bond Yields Rise

• Gold prices remain under pressure at the start of the week as the US Dollar makes a strong recovery from its lowest point since November 12. The recovery is supported by a fresh rise in US Treasury bond yields, which is weighing on the precious metal.
• Investors are increasingly concerned that US President-elect Donald Trump’s proposed tariff plans could spark a new wave of trade wars, potentially driving up consumer prices and prompting the Federal Reserve to halt further rate cuts.
• Over the weekend, Trump threatened to impose a 100% tariff on BRICS nations—Brazil, Russia, India, China, and South Africa—if they attempt to replace the US Dollar with another currency for international transactions.
• This statement added to market volatility, with geopolitical tensions also influencing sentiment. Ukrainian President Volodymyr Zelenskyy expressed willingness to cede occupied territory to Russia under certain conditions to facilitate a ceasefire, while escalating conflict in Syria further heightened risks in the region.
• On the economic front, China’s Manufacturing PMI for November edged up slightly to 50.3, signaling marginal growth, while the Non-Manufacturing PMI eased to 50.0.
• The Caixin Manufacturing PMI also rose to 51.5, raising hopes for increased government stimulus to boost domestic demand.
• This week’s key US economic data, including the ISM Manufacturing PMI, will be closely watched, as investors look for signals regarding potential interest rate cuts, which would influence both the USD and gold.

Gold Price Poised to Retest $2,600 Support Amid Bearish Momentum

Gold (XAU/USD) appears vulnerable to further downside, with a retest of last week’s swing low near the $2,605 level looking increasingly likely. A decisive break below the lower boundary of a descending channel formed over the past week could trigger additional bearish pressure. Oscillators on both the daily and 4-hour charts are gaining negative momentum, reinforcing the bearish outlook. A sustained decline below the $2,600 level would open the door for a move toward the 100-day Simple Moving Average (SMA), currently near $2,575.

On the upside, the former channel support around $2,642-$2,643 now serves as immediate resistance. A break above this level could challenge the $2,652 static resistance and last Friday’s high at $2,665. Continued buying momentum beyond this point could propel Gold toward the $2,700 psychological mark and further into the $2,721-$2,722 supply zone. Clearing this zone decisively would signal that the recent corrective decline from October’s all-time high has ended, setting the stage for a renewed uptrend.