Spot gold fell about 0.6% to $4,319.39 on Tuesday, extending Monday’s decline and moving toward a critical technical support zone as renewed strength in oil and Treasury yields reinforced expectations that US interest rates may remain restrictive for longer. US gold futures retreated to around $4,356.
The main pressure came from increasingly hawkish Federal Reserve commentary. St. Louis Fed President Alberto Musalem said further rate increases are likely to be needed because inflation remains too high and demand has stayed resilient, arguing that incremental tightening could reduce the risk of a more disruptive response later. Chicago Fed President Austan Goolsbee also hardened his tone, signaling a need for an aggressive, front-loaded response if persistent inflation is driven by strong demand and AI-related investment rather than temporary supply disruptions.
The dollar index held near 100.46, close to its recent seven-week high, adding another headwind for dollar-denominated assets. Oil rebounded as Brent rose about 1.7% toward $102 a barrel and WTI also recovered, removing one of gold’s short-term supports. The US 10-year Treasury yield climbed about 2 basis points to 4.98% in European trading.
TD Securities analyst Ryan McKay noted that gold had shown resilience after the Fed’s hawkish rate hike, helped by falling energy prices, but Tuesday’s oil rebound shows why that support can quickly disappear. Gold-backed ETFs have attracted roughly 50 tonnes of inflows so far in September, putting holdings on course for a third consecutive monthly increase.
Technically, gold is testing its 100-day moving average near $4,318, making the $4,300–$4,320 area the most important near-term support. A sustained break below $4,318 would expose the recent low around $4,255 and the post-Fed support region near $4,235. On the upside, gold must reclaim roughly $4,340–$4,350 before facing the larger $4,395–$4,410 hurdle, with a clean move above that opening $4,500 and then about $4,540.
