Gold (XAU/USD) fell more than 1% on Wednesday, trading at $4,541 after reaching a daily high of $4,610, as rising energy prices drove US Treasury yields higher and strengthened the US Dollar ahead of the Federal Reserve's policy decision scheduled for 18:00 GMT [1]. The surge in oil prices, with WTI crude trading above $100 per barrel, contributed to the US Dollar Index (DXY) reaching near two-day highs at 98.89 [1].
US Treasury yields climbed, with the 10-year note rising by 5 basis points to 4.40%, reflecting diminished investor expectations for imminent rate cuts by the Federal Reserve [1]. According to Prime Terminal data, traders no longer anticipate any rate cuts during 2026 [1]. Market sentiment was further pressured by geopolitical developments, as US President Donald Trump extended the blockade over Iranian ports until Tehran agrees to a deal involving nuclear issues [1].
On the economic data front, US Core Durable Goods Orders surged by 3.3%, up from 1.6% in February and significantly above the expected 0.6% increase, indicating robust corporate spending, particularly on AI investments to boost profit margins [1]. Overall goods orders also improved, shifting from a yearly decline of 1.2% to a 0.8% gain, surpassing forecasts of 0.5% [1].
Technically, gold is trading near four-week lows around $4,510, with momentum favoring further downside as the Relative Strength Index (RSI) approaches oversold territory [1]. Key support levels are identified at $4,482 (March 31 low), $4,351 (March 26 swing low), and the 200-day Simple Moving Average at $4,269 [1]. Resistance levels are at $4,600, the 100-day SMA at $4,753, and the 50-day SMA at $4,848 [1].
Market participants are awaiting comments from Federal Reserve Chair Jerome Powell, who may be questioned about his future at the Fed, as Kevin Warsh has advanced in the Senate confirmation process [1].
CONCLUSION
Gold prices experienced a sharp decline due to surging oil prices, rising US Treasury yields, and a stronger US Dollar, with market participants no longer expecting Fed rate cuts in 2026. Strong US economic data and geopolitical tensions further pressured gold, while technical indicators suggest potential for additional downside. The market's focus now shifts to the upcoming Federal Reserve decision and Chair Powell's press conference.