Gold Prices Continue Slide Amid Rising Treasury Yields

Gold prices have continued their downward trend, driven by a surge in Treasury yields, despite equities holding steady. The sell-off began last week with an aggressive breakdown, setting a fresh monthly low. While short-term price action remains bearish, the focus has shifted to whether bulls can defend the $4,000 level, which could signal central banks and large institutions moving reserves into gold from fiat currencies.

The start of last week saw a significant move in gold as prices broke down sharply, reaching a new monthly low. Core PCE data on Wednesday and Non-Farm Payrolls (NFP) on Friday provided market motivation, but rising Treasury yields played a more substantial role. Despite opportunities for a retracement to the $4,250 level, sellers have consistently rejected rallies, keeping prices range-bound since the breakdown.

From a daily chart perspective, the range-bound nature of the price action is more evident, with buyers so far failing to spark a rally. Notably, the tight correlation between gold and 10-year Treasury yields has been inverse, meaning gold has been selling off as yields rise. This inverse relationship highlights how a softening in yields or a pullback could potentially help gold regain some strength.