Gold News: Gold Catches a Bid on Lower Yields While Dollar Pressure Stalls Rally

Gold Catches a Bid Despite Weekly Losses

Spot Gold is catching a bid on Friday, rebounding after getting hammered earlier in the week. The intraday bounce is being helped by a slight pullback in Treasury yields and some relief in the risk-off pressure that’s been crushing everything in sight.

At 12:20 GMT, XAUUSD is trading $4886.74, up $106.07 or +2.22%.

Technical Picture: Trend Still Intact

Technically, unlike Spot Silver (XAGUSD) the trend is still up on the daily chart. A trade through $4402.38 will change the trend to down. Taking out $5091.93 will shift momentum to the upside.

The market is also trading between a retracement zone at $4744.34 to $4541.88 and above the 50-day moving average at $4544.33.

Lower Yields Provide Short-Term Relief

Treasury yields edged lower on Friday, with the 10-year yield down to 4.204% and the 30-year at 4.856%. When yields drop, even slightly, it takes some pressure off gold since the metal doesn’t pay interest. Lower yields make gold relatively more attractive compared to bonds.

Stronger Dollar Caps Weekly Performance

But here’s the thing—gold is still on track for its second straight weekly loss. The culprit? A stronger U.S. dollar. The dollar index is sitting near a two-week high at 97.961 and is headed for a 1% weekly gain, its strongest performance since mid-November. A stronger dollar makes gold more expensive for foreign buyers, which caps the upside and keeps a lid on any sustained rally.

Why the Disconnect Between Daily Gain and Weekly Loss?

So why the disconnect between Friday’s gain and the weekly loss? Simple. The dollar’s weekly surge has been the dominant force, outweighing any short-term relief from lower yields. The tech stock selloff and AI spending fears have driven investors into the dollar as a safe haven, which has been bad news for gold all week long.

Friday’s bounce looks more like a dead cat bounce than a reversal. Gold is “kind of holding its own,” as one analyst put it, but it’s not convincing anyone that the worst is over. Until the dollar weakens or yields drop more meaningfully, gold is going to struggle to find its footing.

The longer gold trades inside the two retracement zones, the greater the volatility once it breaks out. Holding above the 50-day moving average at $4544.33 is giving the market a slight upside bias and if it continues to build a support base above it, the greater the chance for a strong rebound rally.

More Information in our Economic Calendar.