Lingering geopolitical tensions in the Middle East, combined with multi-year highs in American Treasury yields, continue to weigh heavily on gold.
Despite relentless diplomatic efforts to resolve the conflict, the US President’s latest comments about Iran’s inadequate response and renewed military threats have dimmed hopes for a swift de-escalation. Both sides are now on high alert. Experts believe that another round of attacks is likely in the near future. This prolonged standoff keeps energy costs elevated, with oil prices comfortably sitting in the $100–$110 per barrel range. As a result, global inflation risks remain strong, while the chances of a Federal Reserve (Fed) rate cut grow increasingly slim.
Under these circumstances, a strengthening dollar becomes a natural choice for investors, as it is seen as a more reliable safe haven than gold, which does not generate income. The precious metal market is particularly hurt by rising US Treasury yields. Returns on 30-year bonds reached 5.10%, while 10-year securities hit 4.60%—record figures since the 2008 financial crisis. What does this mean for bullion? Nothing good, to put it mildly. The higher US Treasury yields climb, the greater the opportunity cost of holding gold gets. Thus, investors prefer to take profits and pull their funds from the asset.
So, where do we stand? Both speculative and institutional demand for the precious metal have fallen sharply. The technical setup offers little comfort: several key support levels have recently been breached, opening the path to further downside. The next target could be $4,350 per troy ounce.
The ultimate recommendation is to sell gold at the current price, aiming for $4,350 within one to two weeks. To mitigate the risk of adverse market movements, place a Stop Loss order at $4,650, just above support.
This content is for informational purposes only and is not intended to be investing advice.
