Gold Rally Fades as Treasury Yields Surge Following NFP Data

Traders' Opinions

Summary:

Gold slips toward $4,650 as strong US jobs data boosts Treasury yields and the Dollar, while fading hopes for a swift US-Iran peace deal pressure safe-haven demand.

SELL XAUUSD

Close Time

CLOSED

4665.00

Entry Price

4520.00

4725.00

4707.77 -7.70 -0.16%

600.0

Pips

Loss

4520.00

4725.13

Exit Price

4665.00

Entry Price

4725.00

Gold prices edged lower on Monday, with XAU/USD retreating toward the $4,650 region as strong US economic data and fading hopes for a quick US-Iran peace agreement weighed on the precious metal. The decline comes after last week’s rally, as investors reassess expectations for Federal Reserve rate cuts amid rising Treasury yields and renewed Dollar strength.

Market sentiment deteriorated after US President Donald Trump rejected Iran’s latest peace proposal, while Israeli Prime Minister Benjamin Netanyahu reiterated that military operations would continue until Iran’s enriched uranium capabilities are removed. In my view, the collapse in ceasefire optimism has reinforced geopolitical uncertainty, though the market’s primary focus has shifted back toward US monetary policy.

Friday’s stronger-than-expected Nonfarm Payrolls report showed the US labor market remains resilient, easing fears of a sharp slowdown and supporting the Federal Reserve’s higher-for-longer interest rate stance. Treasury yields moved higher on Monday following the data, reducing the appeal of non-yielding assets such as Gold.

The stronger Dollar has also added pressure on bullion prices, limiting the metal’s ability to capitalize on safe-haven demand despite persistent tensions in the Middle East. While geopolitical risks continue to provide underlying support, traders appear increasingly cautious about chasing Gold higher unless economic data weakens or conflict escalation intensifies.

Technical Analysis

From a technical perspective, Gold remains under mounting bearish pressure after forming a clear head-and-shoulders pattern on the 1-hour chart, a structure often associated with potential trend reversals. The pattern developed following the rejection from the $4,760 resistance zone, where the market printed a higher peak forming the “head,” while the surrounding lower peaks created the left and right shoulders. The neckline of this formation was positioned near the $4,680 region, which has now come under sustained pressure.

The breakdown below the neckline significantly weakens the short-term bullish structure and suggests that sellers are beginning to take control after last week’s aggressive rally. XAU/USD is currently hovering around the $4,665 area, struggling to reclaim former support levels, which now act as resistance. In my view, this failure to recover above the neckline reinforces the bearish outlook and raises the probability of a deeper corrective move.

Price action has also started forming a sequence of lower highs and lower lows, confirming deteriorating momentum on the short-term timeframe. As long as Gold remains below the $4,680–$4,700 resistance zone, downside risks are likely to persist. A sustained move lower from current levels could expose the next key support near $4,520, which aligns with a previous consolidation and demand area visible on the chart.

A decisive break beneath $4,520 would confirm broader bearish continuation and potentially open the door toward the $4,450 psychological region. Such a decline would represent a more meaningful correction following the strong upside move seen earlier this month.

On the upside, bullish traders would need to invalidate the head-and-shoulders breakdown by reclaiming the neckline and pushing decisively back above the $4,720–$4,760 resistance region. A successful recovery above that zone would likely neutralize the bearish structure and revive bullish momentum toward fresh highs.

Momentum indicators continue to favor the downside. The Relative Strength Index (RSI) has likely retreated below neutral levels after previously approaching overbought territory, reflecting weakening buying strength and fading upside momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) appears to be crossing lower and flattening, reinforcing the view that bearish momentum is building in the near term.

Overall, the head-and-shoulders formation adds significant technical weight to the bearish case, particularly as Gold struggles beneath former support. Unless buyers quickly regain control above the neckline, the path of least resistance appears tilted to the downside in the short term.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 4,665

STOP LOSS: 4,725

TAKE PROFIT: 4,520

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Gold Rally Fades as Treasury Yields Surge Following NFP Data

Technical Analysis

Risk Disclosure