Over the past five trading sessions, gold has shown a variation of around 2%, without establishing a clear direction that would allow it to break out of its short-term neutrality.
By : Julian Pineda, CFA, Market Analyst
Over the past five trading sessions, gold has shown a variation of around 2%, without establishing a clear direction that would allow it to break out of its short-term neutrality. For now, indecision remains dominant, driven mainly by two factors: the performance of the bond market, considered the gold’s top safe-haven substitute, and the new strategies of central banks in managing their reserves. Both elements have generated a sense of uncertainty that the market has yet to fully reflect in prices. Unless a relevant catalyst emerges, it is likely that neutrality will continue to dominate XAU/USD movements in the coming sessions.
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Are bonds the short-term enemy?
One of the most influential factors behind the recent bearish correction in gold toward the $4,000 per ounce zone in recent weeks has been the rise in demand for U.S. 10-year Treasury bonds, one of the main safe-haven substitutes for gold in the short term. Recently, expectations that the Federal Reserve (Fed) will maintain a neutral rate policy have fueled a rebound in bond yields, which now stand around 4.1%, a level not seen since late September. This increase reflects a steady recovery after the decline recorded in previous months and has started to make bond investments more attractive, which in turn has reduced investor interest in gold in the short term.
Source: TradingEconomics
The key point to note is that, by comparing the recent steady rise in 10-year bond yields with gold’s price action in recent sessions, a clear inverse relationship emerges between the two assets. Currently, there is a negative correlation coefficient of -0.61, indicating a moderate-to-strong inverse correlation in the short term. As Treasury yields have begun to recover, gold prices have shown consistent weakness. It is important to remember that this correlation can shift over time.
Source: Stonex,TVC - TradingView
Thus, what has been happening recently is that bonds, being perceived as a reliable safe-haven asset, function as a substitute for gold. The rising yields offered by bonds have made this market increasingly attractive and, to some extent, have reduced demand for gold. If yields continue to rise, this could create downward pressure on gold in the short term, as part of the capital flow may be shifting from the metal to the bond market.
Can central banks dominate the long term?
In the long term, the outlook may differ, mainly because a recent World Gold Council report showed that central banks purchased a net total of 220 tons of gold during the third quarter of 2025, representing a 28% increase compared to the second quarter of the same year.
This data is significant because it shows that precious metal is increasingly being viewed as a store of value amid a global environment of economic uncertainty. The fact that central banks are raising their exposure to gold strengthens the metal’s credibility as a hedging asset, not only for these institutions but also for other market participants. Although this factor alone has not created a short-term confidence boost, it does suggest that if central bank purchases continue to grow, they could trigger stronger demand for gold in the coming months.
Therefore, as this buying trend persists toward the end of the year, it could become a key catalyst that helps restore confidence in the gold market and fuel a more sustained buying pressure in the months ahead.
Technical Outlook for Gold
Source: StoneX, Tradingview
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Neutrality emerges: Over the past seven trading sessions, gold movements have failed to establish a clear direction that could define a new trend. For now, a neutral bias persists as the price continues to test the psychological barrier at $4,000 per ounce. If prices keep fluctuating within this area, a sideways channel could start to consolidate over the coming sessions.
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RSI: The recent movements of the RSI indicator remain around the 50 line, suggesting a technical balance between buying and selling forces. As long as the RSI maintains this behavior, a sideways range could become more defined in the short term.
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MACD: Regarding the MACD, the histogram has started to show an upward slope and is approaching the zero line, indicating neutral momentum in the short-term moving averages and reinforcing the market’s indecision sentiment.
Key Levels to Watch:
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$4,124 – Key resistance: This corresponds to the 23.6% Fibonacci retracement level, representing the main upside barrier. Sustained movements above this level could revive buying momentum and breathe new life into the bullish trend observed in previous weeks.
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$4,000 – Nearby barrier: This is a psychological level that coincides with the neutrality zone observed in recent weeks and aligns with the 38.2% Fibonacci retracement. Price fluctuations near this area could maintain market indecision and extend neutral behavior in the short term.
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$3,865 – Critical support: This is considered the most important support level, matching the 50-period moving average. A break below this area could signal a structural bearish shift, paving the way for a stronger downtrend and a dominant bearish bias in the short term.
Written by Julian Pineda, CFA – Market Analyst
Follow him on: @julianpineda25
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