- Gold looks vulnerable as government bond yields continue to rise.
- The yellow metal reached a high of $1,684 and pulled back to the $1,670 zone.
- The price continues to move in a wide range, with a bearish bias.
The Prayed rose after the start of the American session to $1,685, reaching a new daily high, but failed to hold above $1,680 and fell back to $1,667. It is hovering around $1,670, while still moving sideways in a wide range between $1,655 and $1,685.
Volatility remains high, but XAUUSD remains range bound. The consolidation takes place within a downtrend that is still in force. A firm recovery above $1,680 could open the door to a further upward correction. On the other hand, below $1,650 could cause an acceleration with the initial target of $1,640.
Following the 75 basis point rate hike by the Federal Reserve, US yields continue to rise on Thursday. The US 10-year yield stands at 3.70%, the highest level since February 2011, while the 2-year yield stands at 4.15%, the highest since 2007. Rising yields are not typically be good news for the gold bulls. In the current context, the bad news could be positive for gold.
Early Thursday, Japanese government intervention in the forex market weakened the dollar and helped XAU/USD rebound. However, the recovery was short-lived.
Technical levels
Source: Fx Street
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