Gold (XAU/USD) experienced a modest uptick on Thursday, trading around the $4,125 level after rebounding from a two-month low of $4,066 reached on Wednesday. However, the recovery in gold prices remains constrained as the precious metal faces headwinds from sharply rising crude oil prices and increasing US Treasury yields. The surge in oil prices follows reports of new attacks by Houthi militias on Saudi Arabian airports, resulting in three fatalities. These attacks have escalated tensions between Saudi Arabia and the Houthis, with the Saudi government supporting the Yemeni government's campaign against the Iran-backed group. The conflict has entered a new phase, raising concerns about potential further attacks on Saudi oil infrastructure, which could impact global energy markets [1].
The rise in energy prices is contributing to higher Treasury yields, as market participants anticipate that the Federal Reserve may need to raise borrowing costs further to combat inflation. This environment is supporting speculative demand for the US Dollar, which in turn is weighing on precious metals like gold [1].
From a technical perspective, XAU/USD is trading at $4,124 and maintains a bearish bias, remaining below the broken downward trendline resistance from the late August highs. The Relative Strength Index (RSI) on the 4-hour chart is below the 50 midline, and the Moving Average Convergence Divergence (MACD) is marginally negative, indicating moderate downside momentum. For bulls to regain control, gold would need to break above the trendline resistance at $4,190 and the September 16 and 24 lows around $4,240, with a further target at the September 25 highs near $4,300. Failure to achieve these levels could see bears retesting Wednesday's low at $4,066, with the possibility of targeting the late-July lows at the $4,000 psychological area [1].
CONCLUSION
Gold's recovery remains fragile as rising oil prices and Treasury yields, driven by escalating Middle East tensions, continue to pressure the precious metal. Technical indicators suggest a bearish outlook unless key resistance levels are breached. Market participants are closely watching for further developments in both geopolitical tensions and US monetary policy.