Gold is losing altitude in Asia as the Dollar Index rose to a 3-week high amid growing speculation that the Federal Reserve would begin the process of balance sheet normalization later this year.
At the time of writing, the yellow metal was down 0.23% at $1253/Oz levels. The Dollar Index clocked a three-week high of 101.31 and was last seen trading around 101.26 levels.
Trades below 200-DMA
The metal trades below the 200-DMA level of $1256.77. Prices rose above the 200-DMA on Friday to a high of $1270.94, but the faded the spike to close at $1253.50 as the 10-year treasury yield recovered sharply from the low of 2.269% to 2.382%.
The yields recovered after the data released on Friday showed the US jobless rate dropped to a 10-year low of 4.5% in March. The markets also seem to have shrugged off the rise in the geopolitical tensions.
Fed’s Bullard was on the wires earlier today, stating the Fed balance sheet size is bigger than it should be. Moreover, the ‘buzz’ word now is Fed’s balance sheet normalization. The metal could take hit Fed’s Yellen talks about downsizing the balance sheet during her speech later today.
Gold Technical Levels
A break above $1256.77 (200-DMA) would expose Friday’s high of $1270. The next major hurdle is seen at $1284 (Mar high). On the other hand, a break below $1249.58 (Apr 6 low) could yield a sell-off to $1243.93 (Apr 5 low) and $1239.88 (Mar 31 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.