XAU / USD swings on both sides of the 21 DMA at $ 1,735

• Gold prices have recently retreated to this week’s lows around $ 1,730, but continue to trade well within recent ranges.
• The precious metal is currently caught between the conflicting forces of a stronger dollar and falling US bond yields.

Spot Gold Prices (XAU / USD) They have been oscillating and recently fell towards this week’s lows around $ 1,730, and were hit by the conflicting forces of falling US bond yields versus the strengthening US dollar. Spot prices continue to trade well within recent ranges; To the upside, last week’s post-FOMC highs modestly below $ 1,756 is the key resistance area to watch, while last week’s low of around $ 1,720 is the main support area to watch out for. . Until the US dollar and US bond yields can begin to move in sync again, it could continue to oscillate on both sides of its 21-day moving average at $ 1,736.50.

Performance of the day

As noted, gold is caught between the conflicting forces of a continued decline in U.S. government bond yields (The 10-year yield is now close to 1.65%, a pullback of nearly 10 basis points from last week’s highs) and a strengthened US dollar (the Dollar index or DXY hit new two-week highs on Tuesday and is comfortably above the 92.00 level again). The reason for the decline in yields on US government debt is not very clear; 1) having been hit relentlessly in recent weeks, investors might be tempted to invest in US bonds with yields now at more attractive levels and 2) with markets in a somewhat defensive mood (global equities, commodities risk-sensitive premiums and currencies are mostly lower), there could be an element of safe-haven demand for US debt.

This last point seems to be the reason the USD and JPY (safe haven currencies) are doing better on the G10 on the day. To be fair, a good part of the USD’s strength also comes from exogenous factors; that is, extreme weakness is seen in the NZD (which is also dragging the AUD and other risk-sensitive currencies lower) after the New Zealand government has apparently eased pressure on the RBNZ to halt the advance in the RBNZs. House prices with the presentation of your own house with a fund of NZD3.8B.

In terms of recent market developments, nothing has really had too much of an impact on price action, but a few stories are worth mentioning; the March Philadelphia Fed Non-Manufacturing Survey was the latest in a series of very robust regional Fed surveys pointing to continued strength in the US economy; Investors will seek confirmation of this in Wednesday’s preliminary US PMI Markit survey (for March), and this could help rekindle some optimism about the US recovery (which could boost yields and USD up again at the expense of gold). Meanwhile, Fed member Robert Kaplan made remarks by speaking earlier about the Fed’s rate hike in 2022 (well ahead of the current FOMC guidance that there will be no hikes until 2023); Clearly, Kaplan is among the most aggressive members of the Fed, but he won’t be able to vote again until 2023, so he won’t actually be able to vote for a raise next year, even if he supports one.

Technical levels