According to a report, gold prices are under pressure from a stronger U.S. dollar and elevated U.S. interest rates, yet persistent buying interest shows that bears have not fully taken control of the market. The decline in gold prices from recent highs has slowed, with the metal meeting resistance at $4,100. Last week, spot gold fell 3.40% in total, closing at $4,140.31 per ounce on Friday, down 0.88% for the day, while the full month of September saw a decline of 6.55%.

Dollar and Treasury Yields Remain the Primary Obstacles

Gold is a non-yielding asset, and a strong dollar along with high Treasury yields have consistently been the two core factors weighing on its price. Last week, the dollar index rose about 1%, and the 10-year Treasury yield briefly broke above 5.25%. Although the dollar and Treasury yields pulled back slightly on Friday, gold did not receive any notable boost, and investor sentiment remained cautious overall even after weaker employment data. Gold had surged to near $4,700 on August 25, then reversed sharply and fell all the way back to the $4,100 range. However, bears have found it difficult to extend the decline below $4,000, with repeated buying support suggesting that bulls have not exited during this broader correction. If gold effectively breaks below $4,000, it would open up more downside room; if gold continues to consolidate above support, it could build momentum for another rebound attempt. The latest U.S. nonfarm payrolls data showed that only 29,000 jobs were added in September, with wage growth slowing to 3.0% year-over-year. Weak employment data would theoretically ease pressure on the Federal Reserve to raise rates and enhance gold's appeal relative to interest-bearing assets, yet gold still closed lower, underscoring the powerful suppression from the dollar and bond markets. For gold to stage a strong rebound, the dollar and real yields need to decline in tandem.

Asia Advances Localized Gold Resource Strategies

With gold prices at historic highs, several Asian countries have begun tapping the value of domestic gold production and promoting self-reliant development of gold resources. Indonesia plans to impose an export tax on raw and semi-finished gold, with rates set between 7.5% and 15% depending on international gold prices, aimed at encouraging refining and processing domestically. South Korea has restarted a physical gold purchasing program, partnering with local refiners to buy gold that would otherwise be exported, building up domestic reserves and reducing reliance on the international gold market. A major Asian country continues to increase its official gold reserves, treating gold as a strategic resource and steadily improving control over its domestic gold supply chain. Singapore and Hong Kong are also expanding regional gold infrastructure, with Singapore building a central bank gold storage system and Hong Kong launching a local gold clearing pilot. Such measures will benefit physical gold demand over the long term and enhance the region's self-sufficiency in gold supply.

Gold Technical Outlook

After a strong rally in August, gold met resistance near $4,700 and pulled back, a signal worth noting. As long as gold remains above $4,000, the long-term bullish structure can be preserved, and the market has formed a new support zone below $4,300. The gold market is currently locked in a tug-of-war between bulls and bears, with steady gold demand from major Asian countries and safe-haven flows providing a floor, while high oil prices, a strong dollar and the risk of the Fed tightening monetary policy again continue to weigh. Before monetary policy pressure eases, it will be difficult for gold to challenge $4,700 again.

Conclusion

Overall, as long as the dollar and Treasury yields remain elevated, gold still faces downside risk, but the buying force above the $4,000 mark should not be ignored. If gold holds that level, the market could stabilize and begin a rebound; if it effectively breaks below, the technical picture would be damaged and the risk of a new rapid decline would rise. Spot gold weekly chart source: Yihuitong. As of 10:25 Beijing time on October 5, spot gold was quoted at $4,160.63 per ounce.