The gold market has experienced a notable correction recently, with prices retreating from higher levels, primarily driven by a rapid rise on the interest rate front. The yield on the U.S. 10-year Treasury note climbed to 4.423% during Asian trading hours, reaching its highest level since July 2025. This development directly increases the opportunity cost of holding gold, diverting capital from non-yielding assets towards higher-yielding bond assets, thereby exerting significant downward pressure on the gold price.
From a macroeconomic perspective, this round of rising interest rates is closely linked to market sentiment around "inflation trading." Rising energy prices, combined with geopolitical tensions, have prompted a repricing of future inflation expectations. In this environment, investors are more inclined to bet on interest rates remaining high or moving even higher, an expectation that reinforces the downward pressure on gold. The combined effect of rising rates and inflation expectations has become the core variable suppressing gold prices.
Nevertheless, the current release of market sentiment is not yet complete, suggesting gold may remain under short-term pressure. However, as sentiment potentially reaches an extreme, the pace of the price decline could see a temporary correction. From a technical standpoint, gold has broken below its prior medium-term uptrend line, indicating a shift in the underlying trend. Without a clear improvement in fundamentals, any price rebounds are likely to be corrective in nature rather than signaling a trend reversal.
From a support perspective, the market is widely focused on the area around $4100. This level represents a previous zone of dense trading activity and a potential psychological support level. If the price stabilizes within this region, it could trigger short-covering by bulls, leading to a technical rebound. However, it is crucial to emphasize that, in the absence of a substantive change in the current macroeconomic environment, the sustainability of any rebound remains questionable.
On the daily chart, gold has clearly broken below the uptrend line, forming a structure of decline from highs. The moving average system is beginning to weaken, indicating a bearish shift in the medium-term trend. Regarding momentum indicators, the RSI has fallen rapidly into a neutral-to-weak zone, suggesting a significant loss of bullish momentum. A sustained break below $4100 could potentially open the door for further declines.
On the 4-hour chart, gold is showing signs of consolidation and repair following an accelerated decline, with short-term conditions appearing oversold. The MACD momentum is gradually converging, indicating a marginal weakening of bearish force. If a short-term rebound occurs, resistance is anticipated in the $4200-$4250 range. Should the rebound lack strength, the market may resume its pattern of oscillating decline.
In summary, the gold market is currently in a transitional phase, moving from being driven by "inflation-trading-led gains" to being dominated by "interest rate-induced correction." In the short term, market sentiment may not be fully exhausted, leaving room for continued price volatility, although technical support exists near $4100. For the medium term, the trend has weakened. A renewed bullish cycle for gold likely awaits key developments such as a decline in interest rates, a cooling of inflation expectations, or a shift in policy stance. Until such conditions materialize, a cautious, watchful approach or range-trading strategies are advisable for investors.