XAU / USD remains vulnerable amid rising US Treasury yields.

• XAU / USD struggles to stage a convincing bounce on Monday.
• The 10-year US Treasury yield is approaching multi-month highs.
• XAU watch out for $ 1756 and 1750 as the next bearish targets.

The XAU lost its traction after testing $ 1,800 on Thursday and ended up closing the week with small gains at $ 1,767. With US Treasury yields continuing to push higher on Monday, the XAU / USD is struggling to recoup its losses in a convincing manner. At time of writing, the XAU / USD was down 0.15% on the day at $ 1,765.

The 10-year US Treasury yield, which gained 4% and caused the XAU / USD to drop sharply on Friday, is currently climbing 2.85% daily at 1,619%. On October 11, the 10-year yield reached its strongest level since June at 1.636% and staged a deep correction in the first half of the previous week. With a daily close above that level, another upward extension could be witnessed and gold could be under renewed downward pressure.

Meanwhile, the US Dollar Index tracks the performance of the USD against a basket of six major currencies, moving sideways around 94.00 and limiting the decline of the XAU / USD for the time being.

Furthermore, the negative shift in risk sentiment seen following disappointing Q3 growth data from China earlier in the day appears to be allowing the precious metal to find some demand as a safe haven.

However, investors are likely to continue reacting to fluctuations in US Treasury yields, as the US economic calendar will not offer any high-level data releases for the remainder of the day.

Short-term technical outlook for gold

“Sellers are looking at the next support at $ 1,760, where the four-hour 100 SMA merges with the Bollinger Band one day in between,” notes Dhwani Mehta, Senior Analyst at FXStreet. “If the downside momentum accelerates, then the one-day S1 pivot point at $ 1,756 will be challenged.”

According to Mehta, $ 1,765 is critical for gold buyers to initiate a significant recovery towards $ 1,768, where the 61.8% Fibonacci one-week retracement is located.

Additional levels to consider