Gold News: Volatility Rises as Gold Price Eases from Record High on Strong Yields

Gold Breaks Above $3,500 as Traders Focus on Fed Rate Cut, Dollar Strength and Treasury Yields

Spot gold surged to an all-time high of $3,508.79 on Tuesday, before easing to $3,481.80 during U.S. trading hours. The rally extends a nine-day run from $3,311.56, supported by widespread expectations of a Federal Reserve interest rate cut later this month.

However, strong U.S. Treasury yields and a firmer dollar may pose short-term headwinds, increasing the risk of a corrective pullback toward key support between $3,410.17 and $3,386.90.

At 11:47 GMT, XAU/USD is trading $3484.95, up $8.59 or +0.25%. This is down from a record high of $3508.79.

Fed Rate Cut Bets Fuel Gold Rally Past Key Resistance

Gold’s historic breakout is being driven primarily by dovish expectations from the Federal Reserve. According to the CME FedWatch Tool, traders are now pricing in a 90% chance of a 25-basis-point cut at the September 17 policy meeting. Lower rates reduce the opportunity cost of holding non-yielding assets like gold. Market participants are also eyeing Friday’s nonfarm payrolls data, which could confirm or challenge current rate expectations.

Analysts note that the bullish case for gold remains intact even if a temporary retracement develops. “Gold’s rally is set to be heavily influenced by how much the Fed’s rate-cutting path adheres to market projections,” said Han Tan of Nemo.money. In addition to monetary policy, ongoing central bank purchases, safe-haven demand, and uncertainty tied to U.S. trade policies are keeping the metal well bid.

Dollar and Treasury Yields Add Volatility to the Rally

Gold’s intraday volatility came as U.S. Treasury yields jumped across the curve. The 10-year rose over 6 basis points to 4.287%, while the 30-year reached 4.978%, both reacting to legal developments around the Trump-era tariffs and a stretched U.S. fiscal position. Meanwhile, the dollar index gained 0.7% to 98.3, drawing support from the yield curve and incoming U.S. data.

A strong dollar and rising yields typically weigh on gold prices by making the metal more expensive for overseas buyers and reducing its appeal versus interest-bearing assets. However, traders remain focused on the broader trend, which has seen gold rally 27% year-to-date, driven by monetary policy shifts and geopolitical uncertainty.

Gold Prices Forecast: Still Bullish, but Pullback Likely Before Higher Highs

Technically, gold remains in a strong uptrend, with swing chart analysis pointing toward a potential move to $3,879.64 by September 23. However, a near-term correction into the $3,410.17–$3,386.90 zone is increasingly likely given overbought conditions, rising yields, and a firmer dollar.

Traders are expected to defend that support area aggressively. As long as prices remain above $3,311.56, the bias stays firmly bullish, and dips should be viewed as fresh buying opportunities.

More Information in our Economic Calendar.