Gold Steadies Near $4,140 Amid Rising Treasury Yields and Strong Dollar

Gold prices held steady near $4,140 during early Asian trading, as a stronger U.S. Dollar and rising Treasury yields dampened demand. The 10-year Treasury yield climbed to 5.349%, its highest level since April 3, 2002, before easing slightly to 5.30%. Similarly, the 30-year yield increased to 5.661% after peaking at 5.703%, a level not seen since late May 2002. These higher yields, combined with a firmer dollar, offset softer expectations for an imminent Federal Reserve rate hike.

The probability of a rate hike in October dropped to 22.7% following a weaker-than-expected September Nonfarm Payrolls report and downward revisions to previous months' data. Traders are now focusing on the release of the September Federal Open Market Committee (FOMC) minutes, set for Wednesday, which could provide insights into future monetary policy directions.

Analysts noted gold's sensitivity to long-end and real yields, with elevated oil prices contributing to sustained inflation and term-premium concerns. Recent Fed communications have taken a hawkish tone, reflected in a SpeechTracker score of 9.2/10, compared to an 8.1/10 historical average. The FXS Fed Sentiment Index also rose to 136.59, well above the neutral 100 mark.

Technically, gold remains capped below its 100-day simple moving average at $4,275, with the Relative Strength Index (RSI) at 38.41, indicating bearish momentum. Resistance levels are identified around $4,270, $4,275, and $4,445, while support is near $4,100. Central banks purchased 1,136 tonnes of gold, valued at approximately $70 billion, in 2022, providing long-term structural support for the metal.