Gold Price Likely to Fall Further as US Dollar Reigns
Gold Price, News and Analysis
- Gold buffeted by higher US Treasury yields.
- Gold nears support but lower prices likely
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Gold’s Path of Least Resistance is Still Lower
Gold’s attraction continues to fall in the face of rising US Treasury yields and nears a couple of interesting support levels, which if broken will leave the precious metal near the $1,300/oz level.
n the US Treasury space, the closely-watched 2-year currently yields 2.50% while the benchmark 10-year is at, or around, the headline prompting 3.0%, while the US dollar index currently trades at its highest level since January 12.
Yields have risen continually over the last year as expectations of higher US rates have hardened with analysts expecting another two or three 0.25% hikes this year – market expectations of three further hikes currently stand at 48%. Higher US interest rates draw money away from non-interest bearing gold.
Gold is currently trading just above the $1,320/oz., a level that has just held for the last two days. Below here, 38.2% Fibonacci retracement of the December – January rally at $1,316/oz. and the 200-day moving average at $1,308/oz. come into play. If this is broken the March 1 low of $1,302/oz. heaves into view just above the 50% retracement at $1,301.4/oz. The chart is also showing seven lower highs in a row. On the upside $1,335.6/oz. should hold sway for now.
DailyFX analyst Paul Robinson looked at gold in his latest webinar – Trading Outlook – Gold & USD Impact, Dax, S&P 500 and More.
Gold Daily Price Chart (September 12, 2017 – April 25, 2018)
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--- Written by Nick Cawley, Analyst