- After Tuesday’s sharp decline, the technical outlook for gold was pointing south.
- The metal is looking at the lows of Tuesday and last Friday in the area of $ 1,782.
- Fall in Treasury yields helps limit declines in XAU / USD.
The Gold is falling for the second day in a row on Wednesday, although it remains above yesterday’s lows. XAU / USD failed to sustain above $ 1,790 and fell back to $ 1,783.55, just above the recent low of $ 1,782.10.
The negative bias remains in place and the break of the support zone around $ 1782 could trigger a bearish acceleration, being an intermediate support at $ 1775 before $ 1770. To the upside, a recovery above the $ 1795 resistance would ease the downward pressure.
The sharp drop on Tuesday, when it went from $ 1805 to $ 1782, left a damage in the technical landscape. In turn, the strength of the dollar on Wednesday is another negative factor for metals. The US Dollar Index is up 0.05%, and is testing 94.00.
On the bright side for gold, Treasury yields are falling. The 10-year benchmark rate fell below 1.60%. If it continues in this way and extends the fall, gold could be widely favored.
Looking ahead to the next few hours, what happens on Wall Street and with the bond market will continue to be key. There will be a five-year debt placement. The two-year one was successful recently, which may show some acceptance of the new rate levels. In turn, negotiations continue in the Capitol and the infrastructure law could be voted on in the coming days. Regarding the data, the report of durable goods orders for September will be released at 12:30 GMT, which is expected to show a 1% drop after the 1.8% rise in August.
Technical levels
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