Gold’s struggle to maintain levels above $2,030 comes against the backdrop of rising US yields, which have surpassed 4.3% for the benchmark 10-year Treasury bond. This has limited the upside for XAU/USD, particularly ahead of the release of US PMI data.
Despite this, gold has shown resilience, gaining positive traction for the sixth consecutive day and briefly breaching the $2,030 mark during early European trading.
The precious metal has benefited from a weakening US Dollar, which has dropped to a three-week low. Geopolitical tensions in the Middle East have also supported gold’s safe-haven appeal.
The Federal Reserve’s recent hawkish stance on interest rates, as highlighted in the minutes of the January FOMC meeting, has reinforced market expectations of higher rates for a longer period.
This has contributed to elevated US Treasury bond yields, which, in turn, could limit the downside for the USD but act as a headwind for gold, given its non-yielding nature.
In this context, market participants are advised to monitor the 50-day Simple Moving Average (SMA) for XAU/USD, as a sustained break and acceptance above this level could signal a potential bullish trend.