Gold futures have dropped below both their 100-day and 50-day EMAs, forming a bearish crossover on the daily chart, as US and global bond yields surge to multi-decade highs. The move follows fresh data showing accelerating business activity and renewed signals from Federal Reserve officials that more rate hikes are coming, while oil prices jump alongside mounting concern over government debt levels.
Gold futures are trading below the psychological resistance at the 100 EMA of $4,345 and have slipped under the 50 EMA at $4,360, forming a bearish crossover on the daily chart. On the one-hour chart, gold tested the day's low at $4,279.15 before facing resistance at the 20 EMA of $4,314, trading below the 9 EMA at $4,305.61. A breakdown below that support could push gold back toward the day's low, potentially accelerating selling before the close.
Bond Yields Surge on Hawkish Fed Signals
Higher bond yields have capped gold's upside. US Treasury and global government bond yields soared to new multi-decade highs after data showed US and European business activity accelerated at the fastest pace in years, with input prices still rising. Federal Reserve board member Michael Barr said Wednesday more Fed tightening would be needed to tame inflation, and money markets now price a two-thirds chance of another hike from both the Fed and the European Central Bank in October.
The selloff rippled worldwide. Japan's 10-year yield hit its highest level in 30 years as Tokyo markets reopened after a three-day holiday. New York Fed president John Williams reinforced Barr's message in London, saying the Fed would likely need to hike again this year even after last week's move, and the US 30-year Treasury yield surged to its highest in 22 years following his comments.
Oil Rally and Debt Warnings Compound the Pressure
Debt concerns added to the pressure. The OECD warned about rising government debt levels, while the Institute of International Finance said the global government debt servicing bill has risen to more than $3.5 trillion — bigger than spending on defence, energy or AI.
Oil added to the cross-asset pressure. Brent crude futures traded at $105.35, up roughly 2.24%. WTI crude futures traded at $94.10, up roughly 2%.
Source: Commodities Analysis & Opinion
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