XAU/USD Extends Losses as Rising Yields Pressure Bullion

Traders' Opinions

Summary:

Gold fell for a second straight session on Monday, dropping more than 4% over the past two trading days and hitting its lowest level in over two months. A stronger US Dollar, rising Treasury yields, and growing expectations of further Federal Reserve tightening outweighed geopolitical concerns in the Middle East.

SELL XAUUSD

EXP

TRADING

4320.00

Entry Price

4000.00

4520.00

4336.44 +6.49 +0.15%

0.0

Pips

Flat

4000.00

Exit Price

4320.00

Entry Price

4520.00

Gold prices extended their decline on Monday, falling to $4,268 and marking their lowest level in more than two months as investors continued to favor the US Dollar amid rising Treasury yields and increasing expectations of further Federal Reserve tightening.

The precious metal has lost more than 4% over the last two trading sessions, despite renewed geopolitical tensions following missile exchanges between Israel and Iran. While such developments would typically support safe-haven demand for gold, investors have instead flocked to the Dollar, which has emerged as the preferred defensive asset.

Market sentiment remains fragile as concerns grow that the conflict could escalate further, threatening regional stability and energy markets. However, the impact of geopolitical uncertainty has been overshadowed by a stronger US economic outlook and shifting monetary policy expectations.

Friday's stronger-than-expected Nonfarm Payrolls report, combined with robust manufacturing and services activity data released earlier in the week, reinforced confidence in the resilience of the US economy. As a result, investors have increased bets that the Federal Reserve could maintain a hawkish stance for longer, pushing Treasury yields higher and boosting the Dollar.

Higher yields continue to weigh on non-interest-bearing assets such as gold, while a stronger Dollar reduces the appeal of bullion for international buyers. Traders are now closely watching Wednesday's US Consumer Price Index report for further clues on the inflation outlook and the Fed's policy path.

In my view, gold remains vulnerable in the near term as rising yields and Dollar strength continue to dominate market sentiment. Unless inflation data significantly weaken expectations for tighter monetary policy, bullion could remain under pressure despite ongoing geopolitical risks.

Technical Analysis

From a technical perspective, Gold continues to trade within a well-established bearish framework on the 4-hour chart, with recent price action reinforcing downside momentum rather than challenging it. The breakdown below the $4,480 region marked the first major shift in short-term structure, followed by a second wave of selling that carried price through the $4,360 zone, an area that had repeatedly acted as a stabilising base in prior sessions.

The failure to hold these levels has left the market in a vulnerable position, with the broader trend still defined by a sequence of declining peaks and weakening rebound attempts. While price is attempting to stabilise near the $4,280–$4,300 region, the recovery so far lacks conviction and appears more corrective than directional.

Any bounce from current levels is expected to encounter friction around $4,360, a zone that has now flipped from support into supply. Beyond that, the $4,480 area aligns with a heavier technical ceiling where prior breakdowns originated, making it a key reference point for any broader recovery attempt. Unless buyers can reclaim this upper band with follow-through, upside moves are likely to stall.

On the downside, the market remains exposed to a retest of the $4,260 area, which now stands as the immediate inflection point. A clear break beneath this level would reinforce the existing bearish cycle and open the way toward $4,120, a deeper structural support region. Below that, the $4,000 handle comes into view as a longer-term downside marker if momentum accelerates further.

Overall, the chart continues to favour sellers as long as price holds beneath the $4,360–$4,480 resistance band. The recent pullback has not altered the dominant trend, and rallies are still being absorbed rather than extended, suggesting that distribution conditions remain in play rather than accumulation.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 4,320.00

STOP LOSS: 4,410.00

TAKE PROFIT: 4,000.00

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