- Spot gold failed to overcome resistance at the $ 1,740 level and has reversed to $ 1,720.
- XAU / USD has been caught between the conflicting forces of a weaker US dollar, the recovery in US bond yields, and risk appetite.
Gold Spot Prices (XAU / USD) They failed to break their March 2 highs just above $ 1,740 on Thursday and have since reversed to $ 1,720, where spot prices are now trading down about 0.2% on the session. However, gains on the week still stand at 1.2%, which means that gold is in its first positive week in four weeks.
Performance of the day
The US dollar has been falling throughout the day on Thursday, with the DXY falling to 91.35 in recent trading, having started the day closer to 91.80. This would normally be bullish for precious metals like gold, and has certainly offered the yellow metal some support, but other factors have been weighing in.
First, US government bond yields have retreated from lows at the start of the European session to return unchanged on the day; 10-year yields fell below 1.48% at one point early in the session, losing more than 4 basis points at the time (this gold was supporting at the time), but have now recovered above 1.52% ( this recovery sent gold down again). Real returns have seen similar price action, with 10-year TIPS returns flat on the day at around -0.75% from lows initially touched just above -0.8%.
Second, the appetite for risk has been very optimistic; US stocks have performed well across the board and the S&P 500 hit new intraday all-time highs, with markets boosted after US President Joe Biden enacted the stimulus package. $ 1.9 T and amid growing talk about the Biden administration’s upcoming infrastructure. focused stimulus package that is touted as potentially significantly larger than the one just passed. In an environment where active US fiscal policymakers are eager to stimulate and fuel long-term growth in the US economy, that means higher long-term interest rates – something that bears are using as an excuse to sell assets that don’t perform like gold.
Technical Levels
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