The World Gold Council (WGC) states that the US Treasury Department and the Federal Reserve have sent conflicting signals to the market recently. Nevertheless, recent developments have been broadly negative for gold: gold prices have retreated alongside rising global bond yields, putting short‑term pressure on bullion.
WGC analysts pointed out on Tuesday that the US Treasury “appears” to desire lower yields, while the Federal Reserve aims for cooling inflation, yet neither side wants to achieve its goals at the cost of damaging the economy. Between the two bodies, the Federal Reserve wields stronger policy clout. Therefore, markets reacted swiftly after Fed Chair Warsh delivered hawkish remarks last Friday. The 2‑year US Treasury yield surged sharply, reflecting heightened market expectations for future policy tightening, and gold subsequently broke below its 200‑day moving average.
Analysts noted that peRSIstently hot US inflation data and Warsh’s hawkish speech at the Jackson Hole symposium have lifted market bets on near‑term Fed rate hikes. This raises the opportunity cost of holding gold and diminishes its appeal. Meanwhile, global gold ETFs continue to register inflows, albeit at a slower pace; futures net long positions have increased, while aggregate bullish positioning in the options market has edged lower.
Technical Picture Deteriorates, 55‑Day Moving Average Takes Centre Stage
From a technical perspective, the WGC believes gold faces risks of pulling back toward its 55‑day moving average amid fading short‑term momentum and climbing global bond yields. The institution notes that gold previously neared the resistance zone of $4769‑$4774 per troy ounce, formed by the 50% retracement of the 2026 downtrend and the May high. It then fell sharply and breached the 200‑day moving average, potentially ushering in a gradually developing sideways trading range.
The WGC also mentions that daily RSI momentum has completed a topping pattern, and net long positioning had risen substantially beforehand. Against the backdrop of rising global bond yields, gold retains room for further correction. According to the institution, initial support lies at the mid‑August low of $4311 per troy ounce, while the more significant support is the rising 55‑day moving average currently at $4215 per troy ounce. It judges that gold may form a fresh interim bottom around this level.
Resistance Levels and Market Outlook
On the upside, the WGC sets initial resistance at the 13‑period exponential moving average of $4474 per troy ounce, followed by the 200‑day moving average presently at $4530 per troy ounce. A sustained break above this threshold would signal a renewed strengthening of the short‑term trend. Subsequent resistance targets are the recent high of $4696 per troy ounce and the $4769‑$4774 per troy ounce zone.
Overall, the WGC’s assessment suggests that although gold ETF inflows and futures long positions offer some backing, gold is more likely to undergo a round of technical correction in the short run amid rising US Treasury yields and market repricing of the Federal Reserve’s policy path. For traders, the 55‑day moving average near $4215 per troy ounce will serve as a critical level to gauge whether gold can stabilise.