- Gold hit its highest in more than a month but then turned around.
- Stock markets fall sharply, likewise Treasury bond yields remain firm.
- The Federal Reserve meeting begins on Tuesday.
The Prayed is falling on Monday and is approaching $1850, after having climbed in early weekly trading to $1878, the highest level since May 9th. It recently hit a daily low of $1,852.
Gold’s decline is trailing the advance in Treasury yields. The 10-year rate yields 3.23%, which are the peaks of 2018. If it exceeds 3.25%, levels not seen in a decade would be reached.
The drop in bonds comes despite the crash in stock markets around the world. This usually drives demand for safe-haven assets like Treasuries, but this was not the case on Monday, which helped gold pull back.
The pessimism continues to reign at the start of the week of the Federal Reserve meeting. The possibility even grew, according to some analysts, that the central bank will raise the rate by 75 basis points instead of 50. The unknown will be revealed on Wednesday.
The XAU/USD failed to hold above $1870 and returned to the previous range, which has support at 1830$. Prior to this level, another strong intermediate level is in the $1850 area. The break below said area could generate an acceleration to the downside. To the upside, a confirmation above $1870 would support gold.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
