Gold Bulls Struggle Amid Strong US Dollar, Elevated Yields

Gold prices remain capped as US Dollar strength and elevated bond yields continue to exert pressure. The yellow metal's modest recovery in Asia was short-lived, and any meaningful appreciation seems elusive.

The resilient US Dollar remains a major headwind for gold bulls, with oil-driven inflation fears keeping US bond yields near multi-year highs. Geopolitical risks also underpin the safe-haven buck, making it challenging for gold to break out of its downward-sloping parallel channel.

Despite softer-than-expected US inflation data and dovish comments from Fed President John Williams, traders are still pricing in an over 85% chance of a US central bank rate hike by year-end. The ongoing US-Iran standoff has further lifted the safe-haven Greenback to a fresh high since July 28.

The upcoming US economic docket, including the ISM Manufacturing PMI and Nonfarm Payrolls report, will provide crucial cues about the Fed's policy path. Meanwhile, geopolitical headlines might continue to infuse volatility across global financial markets.