Gold mildly bid in Asia as US treasury yields soften

A pullback in US yields allows a minor bounce in gold.
The US fiscal imprudence and positive vaccine news to keep gold under pressure.

Omkar Godbole FXStreet Contributor

Gold, a zero-yielding safe-haven metal, is trading in the green, with the US bond yields pulling back from multi-month highs.

At press time, the metal is changing hands near $1,870, representing a 0.22% gain on the day. The 10-year Treasury yield is hovering near 0.942%, down four basis points from the 4.5-month high of 0.98% reached Wednesday.

However, the relief could be short-lived, as the US fiscal largesse could continue to power gains in yields and weigh over gold.

US drugmaker Pfizer's recent announcement of its coronavirus vaccine's positive results has triggered the unwinding of safe-haven trades initiated earlier this year. The positive news on the vaccine front has also shifted focus to prospects of more robust recovery next year.

From a technical analysis standpoint, the bias has turned bearish following Monday's 4.56% decline, and the downside move will likely gather pace once the support at $1,850 is breached. On the higher side, Monday's high of $1,965 is the level to beat for the bulls.

Technical levels

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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