Gold prices tumbled to a fresh two-week low on Tuesday, breaking below the $4,400 level as surging US Treasury yields and mounting expectations of Federal Reserve rate hikes pressured the precious metal. The XAU/USD pair extended its pullback from last week’s three-month-plus peak, marking a sharp reversal in bullish momentum that had dominated recent trading sessions.
The selloff comes as bond markets price in more aggressive Fed tightening, with rising yields making non-yielding gold less attractive to investors. Fresh Middle East tensions are adding to market uncertainty but have failed to provide the traditional safe-haven support for gold amid the shifting monetary policy landscape. The break below $4,400 represents a critical technical level that traders had been monitoring closely.
Brokers and asset managers should watch for potential margin calls on leveraged gold positions as the swift decline catches momentum traders offside.
FXnCO Insight
Traders should monitor the $4,350 support level closely, as further breakdown could accelerate selling pressure and trigger additional stop-loss orders in what remains an increasingly rate-sensitive environment.
Source: FXStreet