Gold down towards $1,320 on strong USD and easing geopolitical tensions
|- Strong USD, higher bond yields, firm stocks, and easing geopolitical tensions made gold less attractive.
- Gold is nearing the $1,320 multi-week support level.
Gold is trading at around $1,323.31 a troy ounce down 0.93% on Monday as several factors are affecting the yellow metal.
Gold was not able to break above 1,356 last week as the US dollar staged a strong up move. Gold is inversely correlated to the US dollar which is benefiting from strong buying interest since last Thursday. The US Dollar Index, which gauges the greenback against a basket of currencies is now trading in the 90.90 region close to an 8-week’s high at 90.93.
US bond treasury yields rally triggered a strong US dollar demand. The rally in bonds is underpinned by a boost in the US fiscal policy and expectations of more rate hikes from the Federal Reserve Bank.
In addition, the geopolitical tensions between the US, Russia, and Syria have somewhat abated for the time being while North Korea talks about denuclearization shed some optimism about peace. Meanwhile, stocks across the globe are holding up pretty well which lessens the safe-haven appeal of gold.
Gold daily chart:
The short-term trend is bearish. Support is seen at the 1,320 multi-week support and at the 1,307 swing low. To the upside, bulls would likely face resistance at the 1,336 supply level and at 1,356 swing high.
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