Gold Price Forecast: Gold/USD Retreats Below $4,400 Amid Rising US Yields

Spot gold retreated below the $4,400 mark during early European trading on Tuesday, currently trading near $4,397. The metal faced resistance above $4,430 but remains above the $4,315 support level, maintaining a range-bound pattern within the week. A modest rebound in the US dollar and higher US Treasury yields are exerting short-term pressure on gold prices.

**Yields and Dollar Pressure, Gold Sees Modest Pullback**

Rising US Treasury yields have diminished the appeal of non-yielding gold, while heightened risk aversion has fueled safe-haven buying for the dollar, jointly dragging gold prices from recent highs. However, gold still holds the key support at $4,315, indicating the bullish structure remains intact. Market signals show that earlier soft US inflation and consumer confidence data have significantly reduced market expectations for a Fed rate hike in September, a macro backdrop that continues to provide medium-term support for gold.

**Market Focus on Fed Policy Outlook**

Recent data showed the University of Michigan's August consumer confidence index fell to 51.0, below the expected 54.5, while inflation and retail spending showed signs of cooling. According to the CME FedWatch tool, as of last Friday, market odds of a Fed rate hike in September have dropped to around 30% from roughly 50% previously. The fading expectations of rate hikes limit the dollar's upside and create a relatively favorable interest rate environment for gold. Saxo Bank analysts noted that gold has entered a range-bound pattern between $4,200 and $4,500 after profit-taking following its rapid rally.

**Geopolitical Tensions and Physical Demand Offer Underlying Support**

On the geopolitical front, US-Iran tensions persist, with Washington threatening a naval blockade against Iran, pushing oil prices higher and raising concerns over supply shortages, which could still drive some safe-haven flows toward gold. In the physical market, India's gold discount widened to a more than two-month high this week as high prices curbed consumption, while buying interest in the Chinese market also remained subdued, indicating that elevated prices are dampening physical demand. Overall, gold prices may continue to oscillate around $4,400 in the near term, but the bullish bias remains intact.