Gold Struggles as USD Hits New Peak Amid Geopolitical Tensions

Gold prices remain subdued at the start of the week as a surge in US dollar demand weighs on the commodity. Despite geopolitical risks boosting the dollar to its highest level since April 2025, the metal finds some support from sliding US bond yields. Gold (XAU/USD) is trading just below $4,150, nearly unchanged, as investors focus on the upcoming US ISM Services PMI release.

The US dollar gained strength after the latest Nonfarm Payrolls report showed weaker-than-expected job growth and a rise in the unemployment rate to 4.2%. Annual wage growth also slowed to 3.0%, easing pressure on the Federal Reserve to raise interest rates in October. However, analysts at ABN Amro still anticipate a December rate hike due to persistent inflationary pressures.

Geopolitical tensions, including conflicts in the Middle East and the Russia-Ukraine war, continue to support the dollar as a safe-haven asset. Traders are now watching the US ISM Services PMI and speeches by key Federal Reserve officials for further direction on gold prices.

Technically, gold maintains a bearish tone below key resistance levels, with immediate support at $4,098 and significant barriers at $4,225 and $4,269. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators suggest waning upside momentum.