Gold slips below the $2,030 mark as U.S. yields climb.

In the European session on Monday, the price of gold dropped below $2,030. The 10-year US Treasury bond yield, which surged on Friday and currently remains above 4%, exerts pressure on XAU/USD, keeping it in a defensive position ahead of upcoming US data.

Gold price (XAU/USD) continues its retreat from the $2,065 region, marking a one-month high. During the first half of Monday’s European session, the decline persists, pushing the precious metal to a one-week low around the $2,022-2,021 range. This descent is influenced by the anticipation that the Federal Reserve (Fed) will maintain higher interest rates for an extended period, supported by Friday’s optimistic US Non-Farm Payrolls (NFP) report.

The forecast continues to favor an upward movement in US Treasury bond yields, aiding the US Dollar (USD) in maintaining a strong position, nearing its peak since December 11. This trend also prompts capital to move away from the non-yielding gold price. Despite ongoing geopolitical tensions in the Middle East and economic challenges in China, there is no substantial support for the safe-haven asset XAU/USD.

Given the mentioned fundamental context, it favors bearish traders, indicating that the gold price is likely to move downward. Investors are now awaiting the release of the US ISM Services PMI, scheduled for the early North American session. The outcome, coupled with speeches from influential FOMC members and US bond yields, will influence the USD and offer momentum to the precious metal.