- Gold continues to pull back after reaching above $2070 last week.
- Rise in Treasury bond yields puts pressure on the price of the metal.
- The yellow metal could remain under pressure until the Fed’s decision.
Gold is falling for the second day in a row on Monday and is testing the $1960 zone, where last week’s low is. A confirmation below would enable further declines, with a possible target in the $1945 area. Silver is being dragged down by gold and is trading at one-week lows below $25.20.
The sharp rise in Treasury bond yields with several tranches at monthly highs is a negative factor for gold. The 10-year rate reached 2.10% and the 30-year rate exceeded 2.45% momentarily. In Europe, there is also an advance in yields.
The foregoing occurs days before the decision of the Federal Reserve, which would be a rate hike of 25 basis points, starting a cycle of rate hikes. This is not the only focus of the market, which is closely following the situation in Ukraine and the implications.
Bullish gold, but in correction mode
The dominant trend of gold, from a general perspective remains bullish, but in the short term, the bias is to the downside. A firm return above $1985 could alleviate pressures. Below $1958, the next support can be seen at $1945, followed by $1920.
In the opposite direction, at $1978, is the first resistance. Then comes 1985/90$, a horizontal barrier, and the 4-hour mean of 20. If confirmed above this last level, gold could go to test $2010.
Technical levels
Source: Fx Street
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