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Gold prices opened the week with a mild decline, snapping a four-day rally to a one-month high. Hawkish Federal Reserve expectations, elevated U.S. Treasury yields, and a strong U.S. Dollar weighed on the non-yielding metal. However, ongoing geopolitical tensions and a risk-off sentiment provided support, limiting further losses. Strong U.S. Nonfarm Payroll data reinforced the Fed’s higher-for-longer stance, dampening hopes of interest rate cuts. Key inflation data this week could drive market sentiment, while technical indicators suggest potential dip-buying opportunities. Gold prices need to break above $2,700 to sustain bullish momentum, while support is seen near $2,665.

Key Highlights

* Gold prices ease after hitting a one-month high last week.

* Fed rate hike fears and strong U.S. Dollar exert pressure.

* Geopolitical tensions continue to lend support to safe-haven gold.

* Technical support for gold stands at $2,665 amid dip-buying potential.

* Upcoming U.S. inflation data could provide market direction.

Gold prices (XAU/USD) started the week on a subdued note, halting their four-day rally that pushed them to a one-month high last Friday. This decline comes as robust U.S. Nonfarm Payrolls data has strengthened market expectations that the Federal Reserve will maintain its restrictive monetary policy. The U.S. Treasury yields remain elevated near a yearly high, and the U.S. Dollar hovers at a two-year peak, both of which weigh on gold, a non-yielding asset.

Despite these headwinds, persistent geopolitical tensions across Ukraine, Gaza, and Lebanon continue to bolster safe-haven demand for gold. Strikes in Ukraine, escalating sanctions against Russia, and Israeli military activities add to global uncertainty, supporting gold prices from a steeper decline.

Technically, gold prices are showing a potential for dip-buying near the $2,665-$2,664 support zone. A break below this level could lead to a further decline towards $2,635 or $2,605, aligning with a key trend-line support. Conversely, a sustained move above $2,700 could reinvigorate bullish momentum, targeting $2,715 and beyond.

Traders are now eyeing the U.S. inflation data due this week, which could shape expectations for future Fed policy moves. Oscillators on the daily chart indicate room for further gains, keeping bullish sentiment intact if key resistance levels are breached.

Finally

Gold prices face pressure from Fed-driven USD strength but find support amid geopolitical risks. Sustained breaks above $2,700 or dips to $2,665 offer actionable trade opportunities.

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