Gold Price Forecast: XAU/USD struggles below $4,300 level with bears still in control

• XAU/USD bounced up from $4,245 lows on Thursday but remains below $4,300 on track for a nearly 2% weekly decline.
• Fed tightening bets and US Treasury yields at multi-year highs are keeping Gold rallies limited so far.
• The risk remains skewed lower with $4,230 support area on the bears' focus.

Gold (XAU/USD) is trimming some losses on Friday, trading just below the $4,300 level after bouncing from support in the $4,230 area on Thursday. The broader bearish trend, however, remains intact as market expectations pf further Federal Reserve (Fed) rate highs and long-term US Treasury yields above the 5% level are likely to pose a heavy weight on precious metals.

Fed speakers have reinforced the hawkish view this week, the latest examples being Philadelphia Fed President Anna Paulson, who said that the bank will have to apply “modest” rate increases to bring inflation to target, and New York Fed President John Williams, who stated on Thursday that “it is reasonable to see another US rate hike this year.”

Beyond that, US Treasury yields remain at high levels, with the 10- and 30-year notes paying above 5%, at 19- and 22-year highs respectively.

Looking ahead, OCBC strategists underline that “oil and the rates response remain the main swing factors” for gold in the near term. They suggest that “some easing in energy prices or the USD could help gold stabilise,” whereas “a further rise in yields would keep the near-term bias under pressure,” reinforcing the view that the metal’s trajectory will be closely tied to moves in commodity markets and bond yields.

Technical Analysis: The risk remains skewed lower, with $4,230 area in danger

XAU/USD trades at $4,290, but momentum indicators on the 4-hour chart remain neutral-to-bearish, which highlights the fragility of the current recovery attempt. The Relative Strength Index (14) hovers just below the 50 midline and the Moving Average Convergence Divergence (MACD) indicator edges toward the zero line.

Bulls remain capped below $4,300 so far, but the initial resistance emerges at the horizontal barrier of $4,400 area, which has held bulls several times this week. A confirmation above those levels would ease negative pressure and shift the focus towards the early-September highs, just above $4,5000.

On the downside, the $4,230 area (August 6, September 16 lows) is a key support. If that level gives way, previous resistances in the $4,100-$4,150 area are likely to be targeted ahead of the late July and early August lows, just above the $4,000 psychological level.

(The technical analysis of this story was written with the help of an AI tool. Know more.)