6 min read Gold (XAU) is trading in the mid-4,400s, having broken below a key support level and now testing major higher timeframe support. With the Federal Open Market Committee (FOMC) minutes due later today, gold sits at an inflection point that could bring a fresh burst of volatility.
Why gold is under pressure
The pressure on gold is coming largely from the bond market. The US 10-year Treasury yield recently climbed to a 16-month high near 4.7%, as elevated oil prices and accelerating inflation have led traders to rule out rate cuts this year and even price in a rising chance of a hike.
Higher yields tend to weigh on gold, and the cleanest way to see why is through real yields.
Real yields and gold: the inverse relationship
We have overlaid the 10-year Treasury Inflation-Protected Securities (TIPS) real yield against gold on the weekly chart below. The two often move heavily inversely, and the reason comes down to opportunity cost.
Gold pays no yield. It generates no interest and no dividend. A TIPS real yield, by contrast, represents the inflation-adjusted return on holding a near risk-free government bond.
- When real yields rise, holding bonds becomes more attractive relative to gold, because you are being paid a positive return after inflation. The opportunity cost of holding non-yielding gold goes up, and gold tends to come under pressure.
- When real yields fall, the bond alternative offers little or even negative real return, making non-yielding gold relatively more appealing. Gold tends to find support.
This is why the rising real-yield environment we are seeing now lines up with gold’s recent weakness, rather than the move being a simple case of fading safe-haven demand.
Weekly: the 10-year TIPS real yield (white line) overlaid on gold, showing how the two tend to move inversely, with gold easing as real yields rise and firming as they fall.
Weekly chart: the bigger picture
On the weekly timeframe, gold has broken the steep uptrend that had been in place since late 2023. It has since printed a lower low and a lower high, an early sign of a potential shift in structure.
Gold could now be carving out a broad range between the 4,400 area on the downside and the 5,500 highs on the upside. The level around 4,900, where the most recent rejection formed that lower high, is the one to watch. A decisive break below this region could open the door to a more bearish regime on the higher timeframes.
Weekly: gold has broken its long-term uptrend and is now testing higher timeframe support around 4,400, after rejecting near 4,900 to print a lower high.
Daily chart: the levels in focus
On the daily, gold recently broke below an important support around 4,650, a level that could now act as resistance. Price is currently testing higher timeframe support around 4,400, which can be viewed as the last line of defence.
A failure to hold here could see gold continue within its local bearish channel, with the lower channel boundary sitting near 3,800 as a potential downside reference if the selling extends.
Daily: gold has broken below support near 4,650 and is testing higher timeframe support around 4,400, with the descending channel pointing towards 3,800 if that support gives way.
Key levels to watch
- Resistance: around 4,650 (recently broken support), then 4,900 (weekly lower high)
- Support: around 4,400 (higher timeframe support, last line of defence)
- Downside reference: near 3,800 (lower channel boundary)
- Range: roughly 4,400 to 5,500 on the weekly
What to watch today
The FOMC minutes are the key event on the calendar. A hawkish read could add to the upward pressure on yields and weigh further on gold, while any dovish surprise or fresh geopolitical shock could prompt a bounce. With gold sitting right on major support, the potential for volatility is high, and as traders know, volatility is where the opportunity lies.
For more context, see our previous gold analysis: Gold struggles at resistance as traders brace for CPI
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