- Gold spot prices are consolidating at $ 1,780 after falling below $ 1,800.
- The stronger US dollar and a steep US yield curve weigh on the precious metal.
Gold Spot Prices (XAU / USD) appear high in the middle of US business hours on Thursday. Earlier in the day, spot prices tumbled below the psychologically important $ 1,800 level and it is now trading $ 1,780, shedding more than $ 40 or just under 2.5% on the day. The move saw spot prices break below the previous 2021 low at close to $ 1,803 and gold bears will now have their sights firmly fixed on the November 30, 2020 low of $ 1,764.57.
Back to the gold; Another factor that is cited as a weight for the precious metal is a steeper slope of the US yield curve. The 2- and 10-year yields (the difference between the yield on US government bonds to 2-year and 10-year yield) expanded more than 3bp on Thursday to highs above 105bp. Analysts at TD Securities comment that the steepening of the yield curve “ultimately means that the cost of keeping gold on the curve is increasing. Gold could fall further and consolidate in response to the general idea that the US and global economy is recovering. “
Meanwhile, ActivTrades chief analyst Carlo Alberto De Casa commented that “growing expectations of a relatively quick end to the pandemic are raising hopes for economic recovery and with it the likelihood that central banks will reduce the current monetary stimulus hyper-moderate ”; If the easing of monetary policy has bottomed out globally (that is, the rate of expansion in money supply and easing of monetary conditions have peaked), then this will not be a good thing for metals markets. precious that are primarily seen as a hedge against fiat currency degradation.
Technical Levels
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