Gold Prices Fall as Investors Weigh Haven Demand Against Rising Bond Yields

Gold prices have been under pressure in early London trade after falling on Friday to mark a second consecutive weekly close in negative territory. The US Labour Day holiday has delayed key data releases, but the upcoming US CPI report on Friday is expected to be pivotal for financial markets. A softer reading could rekindle hopes for holding interest rates unchanged, potentially serving as another catalyst for gold to climb higher.

The technical analysis of gold prices remains uncertain due to recent volatile price action, with the bearish trend possibly resuming after falling for two consecutive weeks. The key areas of resistance have held, at least for now, but a break below $4,310 could see a more decisive move to the downside, with $4,100 and then $4,000 in focus.

Rising bond yields and oil prices continue to boost expectations about a Fed rate hike, which could exert renewed pressure on the near-term gold forecast. The combination of stronger employment and relatively firm wage growth has underscored concerns that inflation might be more persistent than hoped, potentially leading the Fed to raise rates and maintain them at higher levels for an extended period.