Gold Slips as US Treasury Yields Hit 4.85%

Gold prices declined to approximately $4,385 per ounce. The metal lost its earlier intraday high of $4,434. This drop followed a sharp rise in US Treasury yields. The benchmark 10-year yield climbed to 4.85%. This level is the highest since November 2023. The US Dollar Index also strengthened to 98.86. It recovered from a low of 98.60 seen on August 21. Higher yields increased the appeal of interest-bearing assets. This reduced demand for non-yielding precious metals.

The US Treasury announced a plan to buy back up to $6 billion in debt. This amount exceeds the previous minimum of $4 billion. The operation is scheduled for September 10. This move signals active management of longer-dated debt. It contributed to the upward pressure on yields. The market reacted quickly to this news. Investors shifted capital away from gold. They moved funds into bonds offering higher returns. This shift suppressed the price of the yellow metal.

Oil Prices Drive Inflation Fears

West Texas Intermediate crude oil trades near $94 per barrel. This is the highest level since June 3. Prices have risen over 5% this week. The surge follows military conflicts between the US and Iran. The US military reported destroying five Iranian oil carriers. Iran responded by targeting US vessels and ships in the Strait of Hormuz. These events threaten global energy supply. Higher energy costs keep inflation elevated. This forces central banks to consider rate hikes. The Federal Reserve faces pressure to raise rates. This environment is negative for gold prices.

Fed Rate Hike Expectations Rise

Traders price in a 60% chance of a rate hike. This increase is expected at the September 15-16 meeting. The CME FedWatch Tool shows this shift in probability. Upcoming data will confirm this trend. The Producer Price Index releases on Thursday. The Consumer Price Index follows on Friday. Both reports could strengthen the case for higher rates. A hawkish Federal Reserve stance weighs on gold. Higher borrowing costs reduce the metal's attractiveness. Investors favor assets that pay interest. This dynamic limits gold's upside potential.

Technical Levels Define Gold Outlook

Gold holds above the 200-period simple moving average. This level sits at $4,356 on the 4-hour chart. Buyers remain active near this support. The 50-period simple moving average caps upside at $4,415. The Relative Strength Index stands at 45. The Moving Average Convergence Divergence indicator is slightly negative. These signals indicate weak momentum. The near-term bias remains neutral. A break below $4,356 could trigger further selling. Resistance exists at $4,489 and $4,550. Breaks above these levels would open the path to $4,700. Market participants watch these technical boundaries closely.