FX.co ★ XAU/USD, GOLD

Spot gold (XAU/USD) fell to around $4,285 in early Asian trading on Wednesday, pressured by continued selling as rising U.S. Treasury yields and higher oil prices exacerbated persistent inflation concerns. Market participants significantly increased their expectations that the Federal Reserve would take a hawkish stance when it announced its monetary policy later in the day. The benchmark 10-year U.S. Treasury yield hit its highest level since 2007, climbing to 5.041% before settling just above the 5.00% mark. The sharp rise in fixed-income yields has significantly increased the opportunity cost of holding non-yielding gold, creating strong structural headwinds for the precious metal. Meanwhile, reports that Saudi Arabia had shut down a major pipeline bypassing the Strait of Hormuz boosted oil valuations, further weighing on commodity markets. Market analysts pointed out that rising energy costs are a key driver of broader economic inflation, which in turn compels central banks to maintain high interest rates for an extended period. According to CME Group’s FedWatch tool, financial markets are anticipating a high probability of monetary policy tightening, keeping investors on edge awaiting clear policy guidance. Commerzbank analysts warned that if benchmark bond yields remain above the 5% threshold, it will lead to a sharp tightening of public finances, further pressuring risky, non-income-generating assets and significantly limiting profit opportunities. From a technical perspective, daily chart analysis shows that the gold/US dollar (XAU/USD) price remains trapped below the 100-day simple moving average and the middle Bollinger Band, maintaining a clear bearish bias in the near term, as the price struggles to break through resistance levels above. Momentum indicators reinforce this cautious outlook, with the 14-day Relative Strength Index (RSI) hovering around 44, suggesting continued downward pressure rather than an imminent trend reversal. The initial resistance level is clearly defined at the 100-day simple moving average, around $4,330, followed by the middle Bollinger Band at around $4,455. A further technical limit is located near the upper Bollinger Band at around $4,685 in the event of an unexpected bullish breakout. On the downside, the immediate technical support level is near the lower Bollinger Band at around $4,225. A decisive break below this level would confirm the current bearish momentum, potentially accelerating the decline in the metal's price to deeper structural demand levels. Market participants are eagerly awaiting the central bank's upcoming decision and press conference, as any hawkish surprise or clear guidance on future borrowing costs will determine whether gold establishes a sustained recovery or extends its correction to lower psychological support levels.