With gold prices failing to hold the $4,000-per-ounce level, a growing number of analysts say short-term momentum points to further declines, as rising bond yields and a stronger dollar continue to weigh on the precious metal.
Commerzbank commodities analyst Carsten Fritsch said in a report that stubborn inflation pressures, combined with Federal Reserve officials backing a possible 50-basis-point rate hike next month, are cementing the market's hawkish tilt and leaving gold vulnerable to further selling pressure. "Gold has fallen nearly 7% since Tuesday, about $290. Over the same period, rate expectations have not risen nearly as much, and bond yields remain below early-October levels," Fritsch wrote. "The risk is that ETF investors may start selling because of the weak price action. If so, gold prices are expected to fall further."
Simon-Peter Massabni of XS.com believes gold's recent selloff reflects more than just a technical correction—investors are being forced to reassess inflation risks and the Fed's monetary policy outlook. Massabni said the dollar's rise to its highest level since April 2025, combined with elevated Treasury yields, poses a major obstacle for gold; as the 10-year U.S. Treasury yield climbs back above 5%, the opportunity cost of holding the non-yielding precious metal keeps rising.
Ole Hansen, head of commodity strategy at Saxo Bank, said in a report that gold's failure to hold the $4,000 support level has caused some technical chart damage, but investors should not confuse short-term weakness with the metal's long-term fundamentals. "Central banks are still steadily adding to gold for reserve diversification, and ETF investors have shown resilience despite recent volatility. These underlying sources of demand may help limit the scale of the pullback, but if yields and the dollar keep rising, it will likely be hard to prevent further short-term weakness," Hansen wrote.
On Friday, gold futures ended slightly flat in choppy trading—a lower-than-expected U.S. October producer price index (PPI) and stabilizing oil prices eased the inflation concerns that had pressured gold in the previous session. The front-month Comex November gold contract rose less than 0.1% to $3,879.70 an ounce, its second-lowest settlement of the year; front-month November silver fell 1.9% to $49.031 an ounce, its lowest settlement since November 7 last year. For the week, gold and silver fell 4.5% and 5.3%, respectively.
Comments