- XAU/USD is approaching the $1,900 signal, amid falling 2-year US Treasury yields.
- Gold bulls have been on the rise for three days.
- Markets are cautiously preparing for the release of the US CPI.
The price of gold (XAU/USD) it has moved higher in the last four days and is up around 0.80% on the day at $1.884. Falling US Treasury yields have pushed the price of gold higher, while the market reduces any possibility of a rate hike of 50 basis points for the March FOMC meeting.
He XAU/USD has benefited from the weakening US dollar at the beginning of the Asian session due to the intervention of the Federal Reserve (Fed) and the US Treasury in the banking system to rescue Silicon Valley Bank (SVB) and Signature Bank.
As the rising cost of borrowing in the US is affecting financial health, the market has been hit with the consequences of the SVB’s intervention.
The XAU/USD is showing strong bullish momentum on the back of falling yieldsas the price of gold is inversely correlated with US Treasury yields – as gold is sensitive to the shorter end of the yield curve.
Last Friday there was a sharp drop at the shorter end of the yield curve following the release of the Non-Farm Payrolls (NFP). The employment figure was higher than expected, while the Unemployment Rate rose to 3.6%. The market’s interpretation of Friday’s NFP is one of caution and fuss. The fact that yields are generally falling, especially at the shorter end of the US Treasury yield curve, is putting severe pressure on the US dollar, as well as equity markets around the world. world.
In the economic agenda of the United States, on Tuesday the Consumer’s price index (CPI), but it seems that the market is approaching the appointment with caution. We are already in the Fed’s “quiet period”, so market dynamics will likely remain fragile until the FOMC meeting on March 22.
Key Gold Price Levels to Watch
The gold price is looking to break above the March high at the $1,894. If it breaks above, the price will head towards the key psychological level of $1,900. Any decline will be capped around Monday’s low at $1,866.
gold technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
