Gold Hits Fresh Weekly High as Treasury Yields Retreat

Traders' Opinions

Summary:

Gold extends its recovery toward $4,400 as Treasury yields ease from recent highs. However, expectations for further Fed tightening and renewed Dollar strength remain key obstacles to a larger rally.

BUY XAUUSD

EXP

TRADING

4359.01

Entry Price

4490.00

4200.00

4381.75 +41.02 +0.95%

0.0

Pips

Flat

4200.00

Exit Price

4359.01

Entry Price

4490.00

Gold continues to recover on Friday, climbing for a second consecutive session and reaching fresh weekly highs as XAU/USD approaches the important $4,400 level. Easing US Treasury yields are providing support to the precious metal, although renewed Dollar strength and the Federal Reserve’s hawkish policy outlook continue to restrict the upside.

The latest move has been helped by a pullback in crude oil prices, which has temporarily reduced concerns that energy costs will drive another sharp acceleration in inflation. That has allowed Treasury yields to retreat from multi-year highs, improving the appeal of non-yielding assets such as Gold.

However, the broader monetary policy environment remains challenging for bullion. The Federal Reserve raised interest rates for the first time since 2023 at its September meeting, while updated projections indicated that policymakers expect at least one additional increase before the end of the year.

Fed Chair Kevin Warsh reinforced the central bank's inflation concerns, stressing that price pressures remain too high. Markets continue to see a meaningful possibility of further tightening, with the CME FedWatch tool indicating around a 54% probability of another hike in October and roughly 88% for a move by December.

The prospect of additional tightening is also helping revive demand for the US Dollar. UOB Group expects the renewed Fed hiking cycle to strengthen US interest-rate differentials against other major economies, creating greater upside risk for the Greenback. A stronger Dollar combined with elevated US rates could make it difficult for Gold to extend its recovery significantly without a clear break above $4,400.

Geopolitical uncertainty nevertheless continues to provide underlying support for both traditional safe havens. Middle East tensions remain elevated following renewed developments around the Strait of Hormuz, while uncertainty over possible further US military action against Iran keeps the geopolitical risk premium firmly in place.

Gold therefore enters the end of the week caught between falling Treasury yields and geopolitical demand on one side, and a hawkish Fed and stronger Dollar on the other. A sustained move beyond $4,400 would strengthen the recovery from Wednesday's six-week low, while failure to clear the psychological barrier could leave the metal vulnerable to renewed selling.

Technical Analysis

Gold is showing signs of a bullish reversal on the 4-hour chart, with XAU/USD trading around $4,360 after recovering from the recent lows near $4,250. More importantly, price is attempting to break through the descending trendline that has controlled the correction since the late-August peak.

The decline from roughly $4,680 has developed within a falling wedge structure, with both the upper and lower boundaries sloping downward while price compression gradually increased. Gold's latest rebound has now pushed through the upper boundary of that formation, suggesting the corrective phase may be approaching completion.

The breakout is occurring around the important $4,340–$4,365 zone, which has repeatedly acted as a pivot. A sustained hold above this region would strengthen the bullish signal, while a short-term retest of the broken trendline would remain consistent with the projected recovery.

Once buyers establish themselves above $4,360, the next significant challenge sits around $4,480–$4,500. This zone previously acted as support before the September decline and has since become a major resistance barrier. The chart suggests an initial test could trigger a temporary pullback before buyers attempt another advance.

A clean H4 break above $4,500 would provide stronger confirmation that the broader bullish structure is returning. That would expose the major $4,675–$4,700 supply zone, where Gold established its previous peak.

Downside risk remains concentrated around $4,300–$4,320. A move back beneath the wedge and a sustained break below this area would undermine the breakout and expose approximately $4,250, followed by the larger support around $4,150.

Overall, the technical picture favors a breakout, retest and bullish continuation. Holding above the former wedge resistance keeps $4,490 as the first major objective, while a successful break there would put $4,680–$4,700 firmly back in sight.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: $4,360

STOP LOSS: $4,200

TAKE PROFIT: $4,490

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Gold Hits Fresh Weekly High as Treasury Yields Retreat

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