Last Updated on August 24, 2026 by Deon
Gold prices went up again on Monday and XAU/USD hit its mark since May 15. I noticed that gold is doing well because US Treasury yields are dropping and people do not think the Federal Reserve will hike rates away. Still a stronger US Dollar and more world tension are making it hard for gold to climb higher.
Gold Gains as Fed Rate Hike Bets Fade
A big reason for this gold rally is how people feel about US money policy. Since July inflation numbers were soft people do not expect the Federal Reserve to tighten things up fast.
Many traders now think the Fed will keep interest rates the same at the September 15–16 meeting. When people expect interest rates gold usually does well because gold does not pay interest or dividends to holders.
At the time everyone is looking at what might happen for the rest of 2026. Even though many think there is a 70% chance of one more rate hike this year new inflation data or words from Fed officials could change everything.
Lower US Bond Yields Support Gold
The drop in US Treasury yields has given gold another push. The US Treasury said they will buy back long-term government debt starting in September.
This plan to buy back debt has helped keep US Treasury yields below their highs. When yields go down it makes sense to hold gold since gold does not pay interest. Lower yields also tend to make the US Dollar weaker.
All of this together makes things look good for XAU/USD.
US Dollar Recovery Limits Golds Upside
Even though the gold trend looks strong the US Dollar is starting to bounce from the low it hit last week.
One reason the US Dollar is staying strong is the chaos in the world now. When things get risky people buy the US Dollar to stay safe which can stop gold from rising even if US Treasury yields stay low.
I am watching how people react to US sanctions against Iran and news about oil moving through the Strait of Hormuz. If things get worse the market might get wild. People will look for safe places to put their money.
Key Economic Events to Watch
The big thing for gold might be US inflation data. Traders are waiting for the Personal Consumption Expenditures (PCE) Price Index on Wednesday.
People watch the PCE report closely because it shows how much prices are rising in the US. This report can change what people think the Federal Reserve will do.
Also many will listen to Fed Chair Kevin Warsh at the Jackson Hole Symposium. What he says about interest rates could change US Treasury yields, the US Dollar and gold prices.
Gold Price Driver Potential Impact on Gold
Lower US Treasury yields Bullish
Fading term Fed hike expectations Bullish
Weaker US Dollar Bullish
safe-haven USD Bearish
Higher geopolitical risk Mixed to bullish
Hotter US inflation data Potentially bearish
Dovish Fed guidance Bullish
Gold Technical Analysis
Looking at the charts gold still looks like it is in a position. Closing above the $4,615–$4,620 area Friday was a big deal. That spot is important because it mixes a moving average with technical levels.
The momentum also looks good for buyers. The MACD is moving up which means the upward trend is still there. However the Relative Strength Index was at 71.77 so gold might be getting a bit too expensive quickly.
The first big wall for gold is $4,684.43. If gold can break past that it might head toward $4,891.38.
On the side if gold falls the first support is at $4,521.97 and then near $4,516.88. If it drops more we might see support at $4,407.86 and $4,293.75.
Gold Outlook
I think the short-term outlook for gold stays as long as prices stay above $4,515–$4,520. Lower bond. The fact that people do not expect a quick Fed rate hike help gold stay strong.
You should be careful. Because of the RSI gold might be overstretched. If the US Dollar gets stronger inflation comes in high or Fed officials sound tough gold could drop for a bit.
For now all eyes are on the US PCE inflation data, what the Fed says and the situation with Iran sanctions. These things will decide if gold hits $4,684 or if it starts to fall.
Disclaimer: This article is, for educational purposes only and should not be considered financial or investment advice. Gold and other financial markets can be highly volatile. Traders should conduct their own research before making decisions. The analysis above is based on information reported by FXStreet as of August 24 2026.
