PUBLISHING PRICE ISSUE:
- Gold prices consolidated to about $ 1,808 US dollar strengthened, yields increased
- The spread of the Delta variant affected global growth prospects, allaying narrowing fears
- Gold prices are likely to have broken the Ascending Channel and opened the door to further losses
Gold negotiable prices modestly lower time Wednesday APAC session amid a stronger US dollar and higher yields. The DXY US dollar Mendex exceeded the 93.00 mark, reaching the highest level observed in more than 3 months when traders returned predictions of Fed interest rate hikes. This took place against the background of rapid spread Delta variant Covid-19 virus worldwide, threatening downtime and tightening travel restrictions.
Singapore is the last country to return to the locks due to a viral recurrence. The government suspended eateries and restricted social gatherings until two weeks after the rules were relaxed as a couple of new clusters were found. The city-state must return to closures, even though it has the highest vaccination rate throughout Asia. More than 70% of Singaporeans have received at least one dose of Covid-19 vaccine since July 19th. This indicates a bumpy improvement in other countries, where vaccination rates are much lower than in Singapore (figure below).
The easing of the economic outlook suggests that monetary policy may remain broadly longer. It can give a supportive narrative to keep precious metals afloat.
Source: Our world data
Separately, Treasury performance setback from a 7-month slump, putting downward pressure on bullion bars. Real yields (nominal inflation), represented by the 10-year inflation-indexed securities rate, rose by 3 basis points to -1.05% overnight from -1.08% (chart below). Real returns and gold prices have historically had a negative relationship, as rising productivity means that the opportunity cost of holding non-interest-bearing metal is higher.
Source: Bloomberg, DailyFX
Technical analysis of gold prices
Technically gold prices are likely to be broken “Rising channelAnd entered the technical recall (diagram below). Right away resistance level can be found for $ 1,835, while direct payments can be found at $ 1,810 and then at $ 1,796. MACD indicator below the neutral center, alluding to it bullish hoog may be weak.
Gold – daily schedule
– Wrote DailyFX.com strategist Margaret Yang
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