Gold edges higher but remains capped in tight range as Dollar and yields rebound

Gold edged higher on Friday but remained trapped within a tight price range as both the US Dollar and US Treasury yields rebounded following a sharp pullback earlier in the week. XAU/USD traded around $4,189, up 1.36% for the day, after briefly touching the $4,200 mark, its highest point in a week. The benchmark 10-year US Treasury yield declined by 11.9 basis points, from 5.354% to 5.235%, helping to ease some of the pressure on bullion.

Strong demand at a US 30-year Treasury auction further contributed to lower yields. However, the downward pressure on the US Dollar and yields subsided on Friday as the underlying factors driving their recent strength remained intact. Elevated oil prices, high inflation expectations, and a hawkish Federal Reserve outlook continue to act as headwinds for Gold prices.

Despite these challenges, central bank purchases and ETF inflows provide some support for the precious metal. The broader technical picture suggests that rallies are currently capped, with the price trading below key moving-average levels. Support can be found at the $4,100 level, while resistance remains at the $4,200 psychological mark and the 100-day SMA at $4,259. A sustained break below $4,100 could push Gold towards the $4,000-$3,950 support zone.