Gold Faces Risk of Selloff Below $4,300

The pressure on gold prices this week is intensifying with the break below US$ 4,300 and the upcoming Federal Reserve (Fed) decision. The strengthening U.S. dollar and elevated Treasury yields are weighing heavily on the precious metal. The U.S. dollar has reached a two-week high, while market expectations for a 25 basis point rate hike from the Fed this week stand at nearly 90%. Additionally, technical analysis of gold today reveals a concerning scenario for investors. Prices now threaten to break through several key technical support levels that have been holding back the downside. The 100-day moving average, around US$ 4,331, and the 50% Fibonacci retracement level from July to August, at about US$ 4,328, are closely aligned, weakening the overall technical setup for gold significantly. The more critical point is the head-and-shoulders formation on the charts, with the neckline located in the region between US$ 4,290 and $4,310. A sustained break below this zone would turn a controlled pullback into a more meaningful technical deterioration. However, timing matters; the Fed decision next week will heavily influence gold’s next move depending on its outcome.