- Gold Hits Weekly Highs Despite Rising Yields.
- XAU/USD is testing the $1870 resistance zone.
- DXY and US yields are at the highest level since May 9.
Despite rising US yields and a strong dollar, the price of gold fired on Friday. The XAU/USD it bounced back to $1,830, but this time it broke $1,850 and a few minutes later it hit $1,870.
Does gold finally react to inflation?
Following the May CPI report in the US, XAU/USD bottomed at $1,824, the lowest level in three weeks, as Treasury yields rose. After moving sideways in a wide range, gold broke above $1,850 and gained more strength.
Technical factors and probably the yellow metal finally reacting to inflation are buoying gold. In the short term, the bears appear to be capitulating. Gold’s rally is taking place even as the dollar and US yields soar.
DXY is up 0.80% to 104.15, the highest level since May 17. The 10-year US bond yield stands at 3.15% and the 30-year Treasury yield at 3.22%, both at the highest level since May 9. At the same time, the Dow Jones and the S&P 500 are down more than 2%.
Typically, a backdrop of higher yields, risk aversion and a stronger dollar is negative for gold. For the last hour, that has not been the case. From the daily low, XAU/USD is up $45 so far.
From a technical point of view, if XAU/USD sustains above $1,870, it will point to more gains. The next strong barrier is seen at $1,890. Conversely, a pullback from current levels below $1,850 would put gold back under pressure.
|Last Price Today||1872.21|
|Today’s Daily Change||24.31|
|Today’s Daily Change %||1.32|
|Today’s Daily Opening||1847.9|
|20 Daily SMA||1844.41|
|50 Daily SMA||1885.5|
|100 Daily SMA||1889.83|
|200 Daily SMA||1842.02|
|Previous Daily High||1855.38|
|Previous Daily Minimum||1840.09|
|Previous Maximum Weekly||1874.16|
|Previous Weekly Minimum||1828.55|
|Monthly Prior Maximum||1909.83|
|Previous Monthly Minimum||1786.94|
|Daily Fibonacci 38.2%||1845.93|
|Daily Fibonacci 61.8%||1849.54|
|Daily Pivot Point S1||1840.2|
|Daily Pivot Point S2||1832.5|
|Daily Pivot Point S3||1824.91|
|Daily Pivot Point R1||1855.49|
|Daily Pivot Point R2||1863.08|
|Daily Pivot Point R3||1870.78|
Source: Fx Street