Gold outlook: Bond market concerns keep precious metals supported

Gold has started the week on the front foot, climbing to a high so far of $4680 per ounce. This comes after the precious metal extended its winning streak to three consecutive weeks with another strong advance Friday. The metal continues to benefit from a softer US dollar and the retreat in expectations for further Fed rate increases. With several potentially market-moving events on the calendar, this could be an important week not just for gold but for financial markets more broadly. For now, the near-term gold outlook remains positive, following its recent advance.

 

What to watch this week

 

Investors will continue to look to the bond and oil markets for clues about the next move in gold. The US ‘debasement’ trade is also facing several important tests, with fresh policy announcements from Washington. Today brings the so-called ‘economic D-Day’ for Iran, while renewed stress in the Treasury market is keeping the issue of US fiscal sustainability firmly in focus. On Friday, Kevin Warsh’s speech at the Jackson Hole symposium could provide another catalyst for markets, while Wednesday’s inflation data will offer an important test of the Fed’s policy outlook.

 

Gold continues to shrug off higher yields

 

As we saw through much of 2025 and into early 2026, gold has once again been rising alongside bond yields. Ordinarily, higher yields should undermine the appeal of a non-yielding asset such as gold. But the nature of the recent rise in yields is important.

 

Yields are not rising because markets expect a more aggressive Fed. Instead, the move reflects growing concerns over the sustainability of US debt, the rising cost of servicing it and broader questions over fiscal credibility. Similar concerns are evident in Japan and elsewhere.

 

This helps explain an otherwise unusual combination: higher Treasury yields, but a weaker dollar. For gold, that is a particularly supportive backdrop.

 

The dollar remains under pressure for now, and the balance between US fiscal credibility, trade policy and the Fed’s inflation stance will be crucial. If the dollar’s recent lows give way, a renewed period of weakness could provide another leg higher for gold.

 

Dollar remains vulnerable

 

Despite rebounding slightly today, the US dollar remains close to its recent lows, reinforcing what is still a pro-risk, soft-dollar environment. However, the risk is that the decline becomes more pronounced if the so-called ‘debasement’ trade returns with greater conviction.

 

That view could face an important test later today, with US Treasury Secretary Scott Bessent expected to announce a new package of sanctions against Iran. The key issue for markets will be whether the measures once again put US trade relations with China under pressure, given that China remains the largest buyer of Iranian energy exports.

 

Any meaningful re-escalation of the tariff conflict would probably be negative for the dollar.

 

Fiscal policy is another issue to watch. Bessent last week flagged the prospect of fiscal consolidation, although there is considerable scepticism over whether the Trump administration will deliver meaningful spending cuts or tax increases given its broader pro-growth agenda.

 

The macroeconomic calendar is also busy. Wednesday brings the release of US core PCE inflation for July, the Fed’s preferred measure of underlying price pressures. Then, on Friday, Kevin Warsh is due to deliver a keynote speech at the Jackson Hole symposium.

 

Warsh is unlikely to offer much clarity on what the Fed will ultimately do with monetary policy next month, but he will be under pressure to reinforce the central bank’s inflation-fighting credentials. If he fails to push back against the recent decline in yields, the dollar could remain under pressure, leaving gold well supported on dips.

 

Technical gold outlook and levels to watch

 

Gold has already cleared a series of resistance levels during its sharp repricing higher over recent weeks. Those former resistance levels should now become areas of support if we see a short-term pullback.

 

 

The first important support zone is between $4,500 and $4,541, where the 200-day moving average converges with a previous resistance area. Below this, the $4,400-$4,450 region becomes the next area to watch on XAUUSD chart.

 

The key line in the sand, however, is $4,324, marking the most recent low before the latest rally. A decisive break below this level would materially weaken the bullish technical picture and call the recent uptrend into question.

 

On the upside, $4,680-$4,700 area is an interesting zone to watch. This is where gold last sold off from back in May. A break above here would bring the round handles of $4,800 and $4,900 into view.

 

Beyond that, the long-term 61.8% Fibonacci retracement comes in around $4,965, followed by the psychologically important $5,000 level.

 

For now, the technical and fundamental pictures remain broadly aligned. Unless the dollar stages a more meaningful recovery or incoming data shows surprising strength to force a reassessment of Fed policy, gold should remain well supported on any short term pullbacks.

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R