Weekend Risks Persist as Key Gold Zone Remains Crucial
Gold
Market Drivers
The U.S. 10-year and 30-year Treasury yields both closed higher, with both returning above the 5% level and reaching their highest levels since 2004. The move strengthened the U.S. dollar and put downward pressure on gold. However, the overall trading range remained relatively limited, meaning the decline could not yet be considered extreme.
Initial jobless claims and new home sales both came in stronger than expected. Initial jobless claims stood at 197,000, below the 201,000 forecast, while new home sales reached 684,000, above expectations of 615,000. Gold showed limited reaction to the data, as much of the decline had already occurred before the releases.
U.S. Treasury Selloff Continues
The U.S. Treasury Department's $6 million buyback program appears to have had little impact on the market. Selling pressure on U.S. government bonds continued, pushing long-term Treasury yields, particularly the 10-year and 30-year yields, higher. This time, however, yields rose across the curve, including the 2-year maturity.
With borrowing costs rising and the possibility of another Federal Reserve rate hike remaining on the table, investors are demanding higher yields to hold U.S. Treasuries.
Interestingly, despite the continued rise in Treasury yields, data indicate that investors are still increasing their gold holdings. This may help explain why gold has not suffered a much sharper decline despite higher bond yields. As a result, the traditional relationship of "higher Treasury yields equals lower gold prices" does not always appear to be working as strongly as it did previously.
Good News, Bad News
The negative development is that the United States and Iran have yet to reach a binding agreement. As emphasized by U.S. President Donald Trump, a deal may not be reached until after the U.S. midterm elections in early November.
This could keep markets concerned about the possibility of renewed U.S. military action against Iran and a potential response from Tehran, leaving the risk of energy supply disruptions in focus.
On the other hand, Iranian President Masoud Pezeshkian has signaled an interest in making progress before the U.S. midterm elections. Pezeshkian offered a ceasefire aimed at easing tensions around the Strait of Hormuz, with Iran potentially reopening the waterway if the United States eases its blockade of Iranian ports.
This development could be viewed as a positive signal, as the proposal indicates Iran's willingness to pursue a ceasefire and potentially reduce tensions.
However, no formal agreement has been reached yet. The rebound in oil prices suggests that markets remain uncertain about whether the Trump administration will accept the proposal. This uncertainty is also limiting gold's upside.
If the United States and Iran eventually reach an agreement, gold could have room to recover above the $4,350 level. Conversely, renewed tensions could keep energy supply risks and inflation concerns elevated.
Focus Tonight
Market attention will turn back to U.S. economic data, with durable goods orders due at 19:30 WIB and the University of Michigan Consumer Sentiment report scheduled for 21:00 WIB.
The main focus is likely to be on durable goods orders. A significantly stronger-than-expected reading could put additional pressure on gold, while weaker data could provide room for XAU/USD to recover.
Gold Technical Analysis
The daily gold candlestick closed bearish but resembled a hammer, featuring a longer lower shadow than the upper shadow and a relatively small real body. Technically, this pattern can signal the potential for a rebound following the previous session's selling pressure.
Gold fell as low as $4,244 before recovering and closing around the $4,273 area. This rebound suggests that buyers were still active at lower levels.
Meanwhile, the September 16, 2026 low at $4,235 remains an important psychological support level. So far, the decline has held above this zone. As discussed previously, as long as $4,235 remains intact, demand could gradually push gold back toward the $4,300 area.
However, downside risks remain heading into the weekend. A daily close below $4,235 could expose gold to further losses toward $4,200, with the more extreme downside target around $4,106.
Stronger-than-expected U.S. economic data could intensify selling pressure, while geopolitical developments may become less supportive for gold if tensions between the United States and Iran continue to ease, although no formal agreement has been reached.
H4 Gold Analysis
On the H4 chart, the decline toward $4,244 occurred within the $4,229-$4,259 green zone, which had previously been identified as a demand area.
Although gold did not reach our preferred buy level at $4,230, the decline to $4,244 followed by a rebound demonstrates that the support zone remains effective as a demand area.
Given the current market structure, the buying opportunity remains open within the same $4,229-$4,259 zone. Therefore, our overall view remains unchanged, with the key focus on whether gold can continue holding above this demand area.