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Gold Under Pressure As Bond Yields Rise

Commentaries & Views

Yesterday’s close: Settled at 1406.7, down 5.8

Fundamentals: Gold is gyrating at a key technical level in a more broadly rangebound trade with competing fundamentals. We have had a narrative more recently that yields are due for a bounce and while this plays out, it is holding Gold back from extended gains. The 10-year yield has been building support at 2% while the U.S data has been better than expected. As you know, we have held a lower for longer rhetoric on rates, but nothing moves in a straight line and as odds for multiple Federal Reserve rate cuts this year mount, we find these expectations out over their skis. PPI data followed in line with yesterday’s CPI coming in stronger than expected. While this has not revved the Dollar, it could keep pressure on Treasuries (supporting rates).

Technicals: We remain unequivocally long-term Bullish Gold, however, as we noted here yesterday, began Neutralizing our Bias upon the fourth test and failure to major three-star resistance at 1432.9. Price action is battling at major three-star support at 1408-1408.5 and continuing to do such on a closing basis while holding intraday pullbacks to key support at 1400.5-1403.5 is constructive and should help pave the way for the bulls. A close back above 1413.4-1414.3 today is bullish. However, a close below 1400.5 will likely encourage waves of selling.

Bias: Neutral/Bullish

Resistance: 1420.5-1420.9**, 1432.9***, 1484.5***

Pivot: 1413.4-1414.3

Support: 1408-1408.5***, 1400.5-1403.5**, 1389.3-1392.6**, 1377.5-1380.3***, 1361.5***

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