- After a positive start on Monday, gold loses strength on the rise in Treasury yields.
- XAU/USD bullish bias, but without great intensity.
The gold is rising modestly on Monday, after pulling away from highs. The value of the zone rose at the beginning of the week to $1815.45, the highest intraday level in a week and a half, but then lost strength and fell back. It is holding above $1810, and capped at $1815.
Among the factors that slowed down gold, is the stronger dollar and the rise in Treasury bond yields, given the growing expectation of the beginning of the cycle of interest rate hikes by the Federal Reserve. They increased after the employment data on Friday and after the meetings of the Bank of England and the European Central Bank last week.
The 10-year Treasury bond rate is over 1.90% and the 30-year-old, above 2.20%. Equity markets in Europe are trading with mixed results while Wall Street futures point to a modest opening loss.
On Monday there will be no impact data from the United States. The strong day this week will be on Friday with the retail inflation data for January, a key input for the next Fed meeting. In addition, the eyes will continue on bonds and Wall Street.
Friday’s sharp bounce left XAU/USD still likely to rise in the short term. A key level looming is $1,817, where the 20-day moving average is. A close above could enable further advances while in the opposite direction, a close below $1,800 would again expose support at $1,790, which for now (on a closing basis) has been containing the lows.
Technical levels
Source: Fx Street
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