Gold plunged below its 200-day moving average for the first time since October 2023, dropping 1% to $4,289.87 per ounce on Monday following a brutal 3% single-day decline on Friday. The catalyst was a hotter-than-expected US jobs report that shifted rate expectations dramatically, with traders now pricing over 50% odds of a Federal Reserve rate hike in 2026 rather than the cuts anticipated earlier this year. The metal has now crashed 23% from its January 29 record high of $5,595, erasing all 2026 gains.
Rising yields are pressuring gold across multiple fronts. US 10-year Treasury yields climbed above 4.50%, while German yields breached 3.00%, increasing the opportunity cost of holding non-yielding assets. Renewed Israel-Iran tensions pushed oil higher, stoking inflation fears and reinforcing a higher-for-longer rate environment. The Bank of Japan and European Central Bank are also expected to tighten policy, creating synchronized global headwinds.
FXnCO Insight
Former support at $4,650-$4,360 has flipped to resistance, shifting the technical burden to bulls while Wednesday’s US CPI print becomes critical for directional clarity.
Source: Finance Magnates