Gold (AU)
- Gold trades at a five-week high after sharp rally.
- Risk-on appetite may weigh on the precious metal.
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Gold Traders Eye Political Backdrop, Bond Yields for Next Move
Gold traders will be eyeing the coming days with interest to see if the overnight risk-on rally can continue, which would begin to weigh on the price of the precious metal. Asian equity markets rebounded overnight – with the Nikkei ending 2.5%+ higher - while traditional safe-haven currencies including the Swiss Franc and the Japanese Yen fell. Despite this, and with global trade war tensions easing marginally, the price of gold remained firm at a five-week high.
In addition the US Treasury will auction a chunky $94 billion of 2-, 5- and 7-year bonds over the week, alongside a $15 billion 2-year FRN and in excess of $120 billion of short-dated paper. This, along with mildly hawkish Fed speak, could push Treasury yields higher and weigh on the recent gold rally. Two-year USTs yield 2.305% and 10-year USTs yield 2.85%.
Gold Price Chart Three Hour Time Frame (September 5, 2017 – March 27, 2018)
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--- Written by Nick Cawley, Analyst
