Gold (XAU/USD) climbed more than 1% on Wednesday, trading near $4,400, even as the US Dollar pared earlier losses and US Treasury yields rose following the Treasury Department's announcement of a bond buyback for the September 10 auction of 10- and 20-year instruments [1]. The 10-year benchmark Treasury yield increased by five basis points to 4.845% after the announcement, presenting a headwind for gold prices [1]. The Treasury intends to buy up to $6 billion of outstanding securities in the 10- to 20-year tranche, marking the first such operation under Secretary Scott Bessent, aimed at capping the rise in long-term US bond yields [1].
Gold has consolidated between $4,340 and $4,400 over the past two days, with technical support at the 100-day Simple Moving Average (SMA) of $4,343 and resistance at $4,425, the high from September 8 [1]. If gold surpasses $4,500, the next resistance levels are the 200-day SMA at $4,537, $4,600, and the August 25 high of $4,697 [1]. On the downside, a drop below $4,400 would see support at the 100-day SMA, with further levels at the September 2 cycle low of $4,282, the 50-day SMA at $4,261, and $4,200 [1].
Market participants are closely watching upcoming US inflation data, as well as the release of US Initial Jobless Claims and the preliminary University of Michigan Consumer Sentiment Index for September [1]. The US ADP Employment Change 4-week average rose to 12K from a downward-revised 10K, and recent jobs data, including last Friday's Nonfarm Payrolls, were described by Fed Chair Warsh as “consistent with full employment,” potentially paving the way for a rate hike if inflation data supports it [1]. Money markets currently price in a 63% chance of a quarter-point rate hike at the September 15-16 Federal Reserve meeting, with a 37% probability of rates being held steady [1].
CONCLUSION
Gold's resilience above $4,400, despite rising US Treasury yields and a stronger dollar, reflects ongoing investor caution ahead of key US inflation data and potential Fed policy moves. The Treasury's buyback announcement and robust employment figures have heightened market anticipation for the upcoming rate decision. Technical levels suggest gold remains in a consolidation phase, with traders watching for a breakout above resistance or a retreat to key support.