Gold Under Pressure as Oil Prices Surge and Bond Yields Rise
Gold has started the week on the back foot as a combination of rising oil prices and increasing bond yields continue to exert pressure on the XAU/USD price. The surge in oil prices is causing Treasury yields to rise, making it more expensive for investors to hold non-yielding assets like gold.
The market's momentum has also played a role in gold's decline, with the metal having already conceded three consecutive weekly losses. This suggests that the strong momentum behind August's rally has largely run its course.
Until the US dollar debasement trade comes back into focus or the greenback takes a drop, fiat alternatives like gold and Bitcoin may remain under pressure in this challenging risk environment. The upcoming FOMC meeting on Wednesday is expected to be closely watched for any hints of future interest rate hikes, which could further support the dollar.
Technical indicators also point to further losses before the FOMC meeting, with resistance around $4,400 being a key level to watch. A sustained break below this level would put $4,000 in focus, followed by the June low around $3,942.