Gold has slipped back below the psychological barrier of $4,000 per ounce, remaining trapped at 8-month lows. The precious metal is under intense pressure from growing expectations of aggressive US interest rate hikes. Trading volumes remain muted due to a packed lineup of crucial macroeconomic data scheduled for this week, and the technical downtrend currently shows no signs of a breakthrough.
Downward pressure has dragged gold contract prices below the 300-day exponential moving average (EMA300, black) for the first time since October 2023. Key moving averages confirm a strong bearish setup, with shorter-term averages tracking below longer-term ones, and the price consistently trading under the EMA10 (yellow). The contract continues to mirror the inverse trajectory of the US Dollar Index (USDIDX, light blue, inverted). It is currently testing support levels from October 2025, completely erasing 100% of the dynamic gains made at the turn of 2025/2026. Source: xStation5
What is driving GOLD today?
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The Dollar Resumes Its Rally: The US Dollar Index returned to clear gains today (USDIDX: +0.2%), quickly halting a brief three-day correction. The US currency is currently hovering near 14-month highs, bolstered by rising expectations of hawkish Federal Reserve policy maneuvers in 2026. The swap market is now pricing in a nearly 70% probability of a September interest rate hike, heavily weighing on non-yielding assets like precious metals.
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Rising Bond Yields Attract Capital: US 10-year Treasury yields jumped 10 basis points over the past 24 hours (climbing from 4.36% at the start of yesterday's session to 4.46% currently), sitting roughly 30 basis points higher than in January. This indicates that the debt market has effectively priced in a US rate hike on its own, even though official rates have remained unchanged at 3.5%–3.75% since December 2025.
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A Dense Macro Calendar Mutes Buying Interest: The temporary relief rally seen early in the week—fueled by an optimistic forecast from Goldman Sachs—fizzled out under the weight of upcoming data. Later today, Kevin Warsh is scheduled to speak at the ECB Central Banking Forum in Sintra. The market will be laser-focused on whether the new Fed Chief addresses the overtly hawkish comments made by other FOMC members and the recent resurgence of inflation above 4%. With key US labor market data also on the horizon, speculative demand is expected to remain highly suppressed until fresh directional signals emerge.
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