Gold Price Stalls Amid Hawkish Fed and Surging Yields

Gold prices have been trending downward over the past couple of weeks, but surprisingly, sellers haven't been able to break below the key FOMC swing low at $4235.

The macroeconomic backdrop is less than ideal for gold, with Treasury yields surging and the Fed becoming increasingly hawkish. However, there's still a strong case for investors to flow into assets like gold or Bitcoin from a long-term perspective.

While it may seem counterintuitive, the fact that gold hasn't broken down more aggressively is actually seen as a positive sign by some analysts. In June, Kevin Warsh sparked market surprise with his hawkish comments, but instead of pushing gold lower, buyers stepped in to support the metal at the $4k handle.

Since then, however, gold has been stuck in a range-bound trading environment, failing to break out above resistance levels. The weekly chart shows upside wicks indicating buying pressure at the lows, but bears have become increasingly aggressive on rallies, leading to lower highs.

The lower-highs formation is a concerning trend for short-term bulls, as it suggests that bears are gaining momentum and could lead to a downside break if not addressed soon. However, long-term investors may find solace in the fact that the $4k level remains intact as support.