XAU/USD Rising rates on US Treasury bonds put pressure on gold. The precious metal may find guidance thanks to the Fed's rate decision and updated SEP. The technical outlook emphasises the short-term reluctance of buyers.
As US Treasury bond rates increased this week, gold (XAU/USD) found it difficult to overcome the negative pressure. Investors prepare for the Federal Reserve's (Fed) crucial policy meeting, which may set the stage for the precious metal's next course of
As the Middle East situation continued to escalate, investors took a cautious approach, and gold finished in negative territory on Monday after beginning the week under bearish pressure. Three oil ships connected to Iran were bombed by the US Navy over the weekend. Iran retaliated by attacking three US-affiliated ships and three oil tankers that were trying to cross the Strait of Hormuz. The previous week's positive US job statistics, along with growing inflation concerns amid rising crude oil prices, fuelled anticipation for a Fed interest rate rise in September and prompted the precious metal to continue declining. Gold recovered momentum on Wednesday, erasing much of its initial weekly losses after falling over 1% on Tuesday. However, the increase in XAU/USD throughout the American session was limited by rising US Treasury bond rates. The 10-year US T-bond yield hit its highest level since November 2023 following the US Treasury Department's announcement that it will purchase up to $6 billion in 10- to 20-year Treasury notes as part of its buyback programme. The Producer Price Index (PPI) increased by 5.4% annually in August, according to US economic statistics released on Thursday. This print is above the 5.3% market estimate and came after the 4.8% gain in July. For the first time since late May, the price of a barrel of West Texas Intermediate (WTI) oil climbed above $100. The 10-year US T-bond yield continued to rise near 5%, further strengthening the USD and pushing XAU/USD down below $4,400. Meanwhile, the CME FedWatch Tool's chance of a 25 basis point (bps) hike in interest rates in September increased to 70%.
