Key Takeaways:
COMEX gold traded at $4,480.41 on Monday, briefly piercing the $4,481.78 level that separates bull market from bear market by classic technical analysis, as surging Treasury yields and elevated oil prices drove a fifth consecutive session of lower highs and lower lows.
"The bond market is repricing the entire rate outlook in real time," James Hyerczyk, a technical analyst with over 40 years of experience, said. "Gold does not pay interest. When Treasury bonds start offering yields at those levels, some of the money that was sitting in gold has somewhere else to go."
The 10-year U.S. Treasury yield climbed to 4.631%, the highest since Feb. 12, 2025, while the 30-year bond yield reached 5.159%, a level not seen since October 2023. The moves followed three consecutive inflation prints above expectations, with April CPI coming in at 3.8% or higher. Traders now price in more than a 40% chance of a rate hike by January, up from near zero a month ago, according to CME FedWatch data.
The selloff has brought gold within striking distance of its 200-day moving average at $4,353.69, a level not breached since September 2023. The 50-day moving average at $4,705.25 is falling toward the 200-day, setting up a potential bearish crossover that technical traders are watching closely. Gold's all-time high of $5,602.23 was set in late January, and the metal is now 20% below that peak.
Oil and the Dollar Add Pressure
Brent crude traded near $110 per barrel, with June WTI between $100 and $105, as the Strait of Hormuz disruption kept energy costs elevated. Higher oil feeds into higher inflation expectations, which in turn keeps the Federal Reserve on hold and supports the dollar. The U.S. Dollar Index recovered from a recent multi-month low of 97.625 and pushed back toward the psychological 100 level, making gold more expensive for buyers using euros, yen, and other currencies.
The chain — war escalation, higher oil, higher inflation, higher yields, a stronger dollar — has run in the same direction for five sessions, creating a dual headwind for gold that has overwhelmed the traditional safe-haven bid.
Key Levels to Watch
The $4,481.78 level held on Monday's first test, with bargain hunters stepping in after the brief intraday pierce. Earlier this year, buyers defended $4,099.12 on March 23, sparking a rally to $4,891.54 by April 17. The question for traders is whether support holds on a second or third test.
A confirmed breakdown below the 200-day moving average at $4,353.69 would mark the first such break since September 2023 and could trigger further technical liquidation. The short-term retracement zone between $4,495.33 and $4,401.84 provides the immediate downside cushion. If Middle East tensions ease and Brent pulls back meaningfully, inflation concerns could cool, pulling the 10-year yield below 4.5% and giving gold room to recover toward $4,700 or higher.
This article is for informational purposes only and does not constitute investment advice.
