Technical Rebound With Limited Follow Through
They also state that higher real yields and fewer expected US Federal Reserve rate cuts are making conditions harder for gold. The article says it was produced with the help of an artificial intelligence tool and edited by an editor. Gold’s recent bounce looks mostly technical, especially after the steep near-20% drop we saw last year following the Iran conflict. While this suggests some room for a short-term rebound, we question if the move has enough fundamental strength to last. The challenging macro environment that weighed on prices in late 2025 has not significantly changed. The biggest headwind remains high real yields, with recent data showing the 10-year TIPS yield holding firm above 2.3% last week, making non-yielding assets less attractive. Furthermore, the latest U.S. CPI print came in slightly hotter than expected at 2.9%, reinforcing the Federal Reserve’s message that rate cuts are not imminent. This reduces a key potential catalyst for a stronger gold rally. For derivative traders, this suggests that selling call options or establishing bear call spreads could be a prudent strategy for the coming weeks. We see the key resistance levels around 4,624 and 4,670 as a solid ceiling for the current rally. Selling calls with strike prices at or just above these levels allows us to collect premium on the view that this rebound will likely fade.Options Positioning Around Key Resistance
This setup is reminiscent of the market we saw in 2023, when the Fed’s aggressive rate-hiking cycle consistently capped gold’s upside despite geopolitical tensions. Even when gold tried to rally then, the high opportunity cost of holding it prevented any sustainable breakout. We believe a similar pressure is building now, limiting how high this technical bounce can go. Create your live VT Markets account and start trading now.
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