Gold Finds Support Above $4,500 Despite Rising Treasury Yields

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Summary:

Gold prices held steady above $4,500 on Monday after a steep four-day decline, as easing geopolitical fears in the Middle East competed against rising US Treasury yields and renewed expectations for future Federal Reserve rate hikes.

BUY XAUUSD

EXP

TRADING

4555.22

Entry Price

4745.00

4515.00

4539.58 -26.78 -0.59%

0.0

Pips

Flat

4515.00

Exit Price

4555.22

Entry Price

4745.00

Gold prices steadied on Monday, with XAU/USD trading marginally higher above the $4,500 level after enduring an aggressive four-session sell-off from recent record highs near $4,770. The pause in downside momentum comes as investors reassess geopolitical risks in the Middle East while simultaneously navigating a rapidly deteriorating global bond market that continues to pressure non-yielding assets.

The precious metal, which had rallied sharply in previous weeks on heightened geopolitical anxiety and safe-haven inflows, is now entering a consolidation phase as markets attempt to determine whether tensions between Washington and Tehran are likely to escalate further or gradually ease through diplomatic channels.

Market sentiment improved modestly during the European session after an Iranian Foreign Ministry spokesperson confirmed that negotiations between the United States and Iran remain active. According to local Iranian media reports, officials from Tehran and Washington are currently evaluating a recently proposed peace framework aimed at reducing regional tensions. Additional reports indicating that Iranian and Omani technical teams are exploring measures to restore secure maritime transit through the Strait of Hormuz also contributed to a calmer tone across broader financial markets.

The Strait of Hormuz remains one of the world’s most strategically important energy corridors, with a significant portion of global crude exports flowing through the narrow passage each day. Any disruption to shipping routes in the region has historically triggered immediate volatility across commodity and currency markets, particularly in Oil and Gold. While fears of an imminent escalation appear to have softened for now, investors remain cautious, unwilling to aggressively unwind defensive positioning until further clarity emerges from ongoing diplomatic discussions.

Despite the stabilisation in geopolitical sentiment, gold continues to face mounting macroeconomic headwinds from rising sovereign bond yields and persistent inflation concerns. The sharp sell-off in global fixed-income markets has intensified in recent sessions, driving US Treasury yields to fresh one-year highs and significantly reducing the attractiveness of non-interest-bearing assets such as gold.

The benchmark US 10-year Treasury yield climbed toward 4.60% on Monday, extending its recent advance as traders recalibrated expectations for the Federal Reserve’s monetary policy trajectory. Stronger-than-expected US economic data, coupled with resilient labour market conditions and sticky inflation readings, have revived speculation that the Fed may need to maintain restrictive policy settings for longer than previously anticipated.

Investors are increasingly pricing in the possibility that US interest rates could remain elevated well into 2026, with some market participants even considering the prospect of additional tightening measures in late 2026 or early 2027 if inflationary pressures fail to moderate sustainably. That shift in expectations has strengthened the US Dollar and lifted real yields, both of which traditionally act as major constraints on gold prices.

Technical Analysis

From a technical perspective, gold remains under short-term bearish pressure following a decisive breakdown from the mid-range consolidation zone on the 2-hour chart. Price action recently sliced through the key $4,645–$4,650 support region, which had previously acted as a structural pivot throughout the past several sessions. The sharp impulsive selloff that followed confirms a temporary shift in momentum toward sellers, although price is now attempting to stabilize near a major demand area around $4,525–$4,540.

The current rebound attempt appears corrective rather than impulsive, with price consolidating inside the lower support band after printing a series of long-wick candles that suggest dip-buying interest is beginning to emerge. However, bulls still need to reclaim the broken $4,645 resistance zone to confirm that the recent breakdown was a false move rather than the beginning of a broader corrective decline. Until that happens, rallies are likely to face selling pressure near resistance.

The broader market structure remains mixed-to-bullish despite the recent weakness. Higher highs from earlier in May are still intact on the wider structure, but momentum has clearly cooled after the rejection from the $4,745–$4,755 supply zone. That upper resistance region remains the dominant ceiling for buyers and represents the key breakout level needed to restore aggressive bullish continuation. A sustained move above this zone would invalidate the current bearish correction and likely open the path toward fresh highs above $4,780.

On the downside, the $4,525–$4,540 area is now the most critical support zone on the chart. This region has already generated multiple reactions and currently acts as the final near-term defense for bulls. A confirmed breakdown below $4,520 would likely accelerate bearish momentum and expose the next downside targets around $4,500 and potentially the psychological $4,480 region. Such a move would indicate a deeper retracement phase rather than a simple pullback within the broader uptrend.

Momentum conditions suggest the market is attempting to recover from oversold territory rather than initiating a fully renewed uptrend. The aggressive selloff created short-term exhaustion signals, and the recent candle structure indicates reduced downside momentum. However, the rebound still lacks strong bullish follow-through, implying that consolidation between $4,530 and $4,650 may continue before the next decisive directional move develops.

From a price action perspective, traders should monitor whether gold can establish acceptance back above the broken support-turned-resistance zone near $4,645. Failure to reclaim that level would keep the short-term bias tilted to the downside, while a successful recovery would strengthen the case for a continuation rally toward the upper supply zone.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 4,555

STOP LOSS: 4,515

TAKE PROFIT: 4,745

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Gold Finds Support Above $4,500 Despite Rising Treasury Yields

Technical Analysis

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