Gold prices retreated toward $4,320 an ounce on Tuesday, pressured by a rebound in crude oil and rising Treasury yields that reinforced expectations US interest rates could stay restrictive for longer than previously anticipated.
Spot gold declined roughly 0.6% to $4,319.39, adding to Monday's losses and approaching a closely watched technical support area. US gold futures traded near $4,356. An early advance during Asian hours faded as investors digested increasingly hawkish Federal Reserve commentary and firmer energy prices.
Fed officials keep further tightening on the table
Monetary policy remains the primary headwind for bullion. St Louis Fed President Alberto Musalem said additional rate increases are likely to be necessary because inflation is still too high and demand has remained resilient. He suggested that acting sooner through incremental tightening could lower the risk of a more disruptive policy response later.
Chicago Fed President Austan Goolsbee has also adopted a firmer stance. According to the Financial Times, he sees a case for an aggressive, front-loaded response if persistent inflation stems from strong demand and AI-related investment rather than temporary supply disruptions.
The dollar index held near 100.46, close to a recent seven-week high, adding another layer of pressure on dollar-denominated gold. Together, these factors have weakened the view that September's quarter-point Fed hike was a one-off adjustment.
Oil's rebound removes a short-term prop
Gold also lost support as crude prices turned higher. Brent rose about 1.7% toward $102 a barrel after four straight losing sessions, while WTI also recovered as traders monitored possible US-Iran talks at the UN General Assembly and renewed Middle East supply disruptions.
The US 10-year Treasury yield climbed about 2 basis points to 4.98% in European trading, reversing part of Monday's bond rally. TD Securities analyst Ryan McKay told The Business Times that gold had shown impressive resilience following the Fed's hawkish hike, helped by falling energy prices and a supportive broader precious-metals backdrop. Tuesday's oil rebound illustrates how quickly that support can evaporate.
Longer-term demand remains more constructive. Gold-backed ETFs have attracted roughly 50 tonnes of inflows so far in September, putting holdings on track for a third consecutive monthly increase.
Critical technical floor comes into focus
The latest decline has pushed bullion directly toward its 100-day moving average near $4,318, making the $4,300-$4,320 area the most important near-term support zone. Momentum remains weak rather than decisively bearish. The daily RSI is near its neutral 50 level and MACD remains close to zero, suggesting neither buyers nor sellers have established control.
A sustained break below $4,318 would expose the recent low around $4,255 and potentially the post-Fed support region near $4,235. On the upside, gold first needs to reclaim roughly $4,340-$4,350. The much larger hurdle remains $4,395-$4,410, where repeated attempts to break $4,400 have failed. A clean move above that region would reopen $4,500 and then roughly $4,540.
This article is for informational purposes only and does not constitute financial advice.
