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Gold Restrained In Higher Yield Environment

Commentaries & Views

(Kitco News) - Gold remains under pressure, ignoring some macroeconomic risks associated with the Italian budget crisis and the continued uncertainty surrounding Brexit. The increase in U.S. long-term rates remains the primary support leg for the dollar and this morning the U.S. 10-year yield flirted with 3.25%. Higher rates will become more problematic for the U.S. as debt-servicing levels will continue to rise and the expectation for slower growth and a more benign Fed is likely in play by early 2019. Holding insurance positions in gold remains appropriate but traders need to remain sensitive to technical levels. Support for gold shows a minor line at the $1,185 level, with more significant support near $1,180. First resistance level suggests $1,192 and then again at $1,197. Watch inflation data this morning for a possible break in the market.

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