Gold: steepest daily drop in about 1.5 years stalls as DXY's advance slows
|- Investors tracking lower stocks and higher yields.
- Gold making the steepest daily drop in about 1.5 years.
Spot gold has been in decline on the back of renewed appetite for the dollar where investors are planning ahead with respect to higher inflation and the possibility of further declines in the stock market due to the possibility of higher bond yields making stocks and the non-yielding precious metal less attractive.
Looking behind the scenes intermarket
Gold futures are down -1.73% while spot is down trading at $1,329.90/oz at the time of writing, having traded between a range of $1,328.45 the low and $1,348.41 the high. The recent move has broken below the 200-hr SMA at 1334.71 and has erased the gains from last week's spike to $1,350 and drift higher to $1,361.66. This drop is the steepest daily drop in about 1.5 years.
The DXY has risen to 89.80 the high on the session, currently up at 89.7190, +0.69% with a YTD return of below -3% at -2.61%. Threatening to snap a 6-day win streak in the cash index, the Dow futures are -0.66% and the S&P is -0.23%. However, the 10-year yields have eased back from session highs, (post a stronger than expected 2-year note auction earlier), currently oscillating around 2.8932%, +0.64% on the day and between a range of 2.8877% - 2.9261% for the day, allowing for a pause in the decline of the yellow metal and slowing the momentum of the dollar's advance.
Gold levels
The 200-hr SMA at $1334.71 capped the bulk of the hourly spike from $1,336.21 earlier in the session while the double bottom at around $1,336 would be the first short-term hurdle for the bulls looking to recover back to $1,350 on the wide with the ultimate objective being a close above the Feb highs at $1,361.66. To the downside, the 61.8% fibo level at $1,328 and today's lows guard a run to $1,320 with a longer-term objective being 1310 and $1,306 YTD lows.
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