XAU/USD Gold maintains its vulnerability early on Thursday while consolidating the earlier fall. Ahead of the crucial Trump-Xi meeting, the US dollar maintains its gains despite high Treasury yields, gold breached the consolidation to the downside, and the daily RSI is in bearish territory.
In anticipation of the much-awaited meeting between US President Donald Trump and his Chinese counterpart Xi Jinping later in the day, gold is consolidating the previous fall in Thursday's Asian markets, reaching weekly lows around $4,300. Gold at the mercy of oil prices and Treasury yields broke the consolidation to the downside on Wednesday after failing to maintain its previous range trading. It was under tremendous pressure as oil prices sharply increased and rekindled concerns about inflation, which caused US Treasury yields to soar once more. The opportunity cost of storing non-yielding assets like gold rises with higher rates. After US President Donald Trump threatened to "annihilate" Iran, Tehran's leader pledged to never surrender, raising doubts about any possible resolution to the Middle East conflict. Furthermore, there is still a significant potential for strikes on Saudi Arabia by the Houthi militia in Yemen, which Iran supports. These elements caused oil prices to rise from multiweek lows and return to the $100 mark.In the midst of growing hawkish predictions regarding the Federal Reserve's (Fed) interest rate outlook, rising Treasury bond rates boosted the US dollar (USD), a double-whammy for the shiny metal. The hawkish message of recent remarks by Fed policymakers reinforced the idea of more rate hikes or a higher-for-longer policy.
