Rising Bond Yields Squeeze Gold Prices Amid Inflation Pressures

Gold prices have fallen for four consecutive sessions, and Forex.com analyst Fawad Razaqzada believes this trend could continue. According to Razaqzada, precious metals are struggling due to elevated oil prices driving inflation pressures higher.

The main reason for gold's decline is the surge in bond yields, with 10-year Treasury yields pushing above 5% and 30-year yields testing levels last reached in 2007. Typically, when yields rise, gold heads lower as the opportunity cost of holding a zero-yielding asset increases.

Razaqzada also notes that gold faces growing technical headwinds, with traders who went long during the August rally now trapped. However, market sentiment is fluid and can quickly change if investors lose faith in the Federal Reserve's ability to control inflation or yields.