FX.co ★ XAU/USD, GOLD

Gold prices (XAU/USD) fell for the fourth consecutive day on Wednesday, declining slightly by about 0.2% in Asian trading to around $4,115 per ounce. Gold was pressured by a strong rebound in US Treasury yields, driven by a sustained rise in global crude oil prices over the past few weeks. As of this writing, the yield on the benchmark 10-year US Treasury note had risen 0.3% to around 5.13%, a strong recovery from a four-week low of 5.04% reached last week. Theoretically, higher yields on government-backed fixed-income instruments increase the opportunity cost of holding gold, which does not pay interest or coupon payments, thus reducing its relative investment appeal. Ongoing concerns about inflation in the energy market pushed West Texas Intermediate (WTI) crude prices up 1.1% in Asian trading, nearing the $99 per barrel mark. The upward momentum in energy prices is primarily driven by geopolitical risk premiums stemming from ongoing conflicts in the Middle East. Despite unconfirmed media reports on Tuesday that Qatar and Pakistan had presented a diplomatic proposal to broker a compromise between the United States and Iran, causing a temporary spike in oil prices, prices quickly recovered after Iranian officials denied the reports. However, Iranian Foreign Minister Abbas Araqchi confirmed that Iran is still conducting indirect negotiations with Washington through diplomatic intermediaries such as Qatar and Pakistan. The continued rise in energy prices has exacerbated concerns about rising global inflation, prompting financial markets to reassess the direction of the Federal Reserve's monetary policy. The market widely expects the Fed to keep its benchmark interest rate within the target range of 3.75% to 4.00% at its next meeting in October. Meanwhile, financial market participants are closely monitoring the capital spending trends of major US tech data center companies, which have become a key structural factor influencing US Treasury yields. Investors are heavily focused on upcoming third-quarter earnings reports, with Meta expected to release its quarterly financial results later today. According to a Goldman Sachs research report cited by Reuters, Meta and its peers—the giant data center operators specializing in artificial intelligence—are projected to increase their combined capital expenditures to $1.2 trillion next year. Over the past few months, massive bond issuances and borrowing by US data center giants to finance their rapid expansion into AI infrastructure have been a major driver of rising bond yields. Furthermore, a recent research report from Gartner warns that AI infrastructure companies will spend more than $8.5 trillion by 2030, while AI revenues in the enterprise and consumer sectors are expected to reach only $3.6 trillion. This suggests that over $4 trillion in underlying assets could face significant devaluation risks by 2032. From a technical analysis perspective on the daily chart, spot gold is trading at $4,124.56 per ounce, indicating a clear short-term bearish trend. The price remains below the 20-day exponential moving average (EMA), currently at $4,178.85. The continued strong resistance at this key upper level suggests that any intraday rally will be vulnerable to renewed selling pressure. Momentum indicators reflect a relatively weak market environment. The 14-day Relative Strength Index (RSI) stands at 41.77, remaining firmly in slightly negative territory, indicating weak upward momentum and far from oversold levels. On the upside, the 20-day EMA, around $4,178.85, is providing immediate technical resistance. To alleviate the current downward pressure and create conditions for a stronger price recovery, it is crucial to ensure that the daily closing price remains consistently above this exponential moving average (EMA). On the other hand, the important psychological level of $4,000 remains a key structural support zone that should be monitored, in anticipation of increased selling momentum in the coming trading days.