Gold prices remain under pressure as the market navigates a complex mix of economic factors. The US dollar and Treasury yields, though slightly eased, still find strong support, with the 10-year yield holding steady around 5%. This, combined with a late surge in oil prices on Friday, has revived inflation concerns and weighed on gold. The precious metal initially recovered on Thursday but reversed lower on Friday, signaling persistent selling pressure.
The oil market saw a significant rally on Friday, with crude prices adding around $3 as tensions over a potential US attack on Iran resurfaced. This geopolitical risk has elevated the risk premium in crude, reinforcing inflation worries and complicating the outlook for interest rates. The Nasdaq experienced one of its worst sessions of the year, falling around 2.2%, highlighting the broader market impact of higher oil prices.
Despite the near-term challenges, gold may find support from central bank demand, particularly from the People's Bank of China. Continued buying by central banks could provide a floor under gold prices, even as the technical outlook remains bearish. China's economic data, due on Monday, could also influence gold, with weak numbers potentially weighing on metals demand.
Technically, gold has staged a recovery from key support around $4,075 to $4,100 but reversed lower on Friday. A move above the trend line and resistance near $4,223-$4,282 would be a constructive signal, but until then, gold could face further selling pressure, especially if oil remains elevated and Treasury yields recover.