GOLD OUTLOOK: XAU / USD PRICE EXTENDS IN PRESSURE AREA WITH REAL YIELD
- The price of gold on Wednesday, it rose another 1% as real yields slipped further
- Somewhat softer US dollar could also help XAU /USD higher
- The precious metal may give up recent gains if the Treasury bounces back
Changing the price of gold has progressed over the last eight trading sessions. The XAU / USD has now risen 3.2% to $ 1830 on Wednesday, rising 1%. Gold prices appear to be rising in real yields in free fall mode. In fact, the real yield on the 10-year US Treasury fell to its lowest level since 12 February at -0.97%.
The US dollar is carrying yesterday’s power red hot inflation data may also put pressure on gold prices. Not to mention, the Fed warned Powell today, during congressional statements today, that we should not act prematurely to curb recent inflation. Keeping interest rates low while inflation rises is a bullish environment for gold as it keeps real yields depressed.
GOLD PRICE CARD WITH TEN YEARS OF TREASURY FROM YIELD OVERLAID
I will discuss this and the potential of gold and silver price action to recover from June’s disgusting -7% of my sales Top Q3 Top Trading Idea. Specifically, I think the probability is significant that Fed officials will continue to look for inflation and delay the narrowing timeline. This may respond to a loosening of Fed interest rate hikes, which is likely to raise the price of gold as real yields are lower in response.
This means that the withdrawal of the Treasury’s profitability seems to be a bit exaggerated. A rebound higher than the yield thus creates a headwind for the gold. From a technical point of view, the price of gold is also facing resistance at around $ 1,835. This technical hurdle is highlighted by the 50-day simple moving average, upper Bollinger band and 38.2% Fibonacci retracement from August 2020 to March 2021. While these technical barriers may keep the momentum up, the other lower leg with real yields may catalyze a breakthrough on the top side toward the $ 1,900 handle.
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