Gold plummets to fresh nine-day lows near $1,492 on surging US T-bond yields


  • Kansas Fed President George prefers to keep rates unchanged.
  • 10-year US Treasury bond yield gains more than 2%.
  • US Dollar Index clings to small daily gains near 98.30.

The XAU/USD pair came under renewed bearish pressure in the last hour and broke below the critical $1,500 as the rising US Treasury bond yields made it difficult for the safe-haven gold to find demand. After dropping to a session low of $1,492.58, the pair recovered slightly and was last seen trading near $1,495, losing 0.5% on the day.

Hawkish Fed commentary lifts T-bond yields

In an interview with Bloomberg today, Kansas Fed President Esther George argued that it was not the time for accommodation citing strong labour market and added that she would prefer to leave the rates unchanged. "Businesses are still reporting issues finding workers, we are seeing higher wages," George added.

These comments seem to have provided a boost to the US Treasury bond yields. The 10-year reference, which spent a large portion of the day moving sideways, is now up 2.83% on the day at 1.622%. 

George's hawkish comments also allowed the US Dollar Index (DXY) to stay in the positive territory despite the sharp rise witnessed in the GBP/USD pair. As of writing, the DXY was up 0.05% on the day at 98.30.

Later in the day, the IHS Markit's preliminary Manufacturing and Services PMI reports from the US will be looked upon for fresh impetus. Additionally, markets will be keeping close eye on Wall Street's performance to get a sense of the market sentiment. At the moment, the S&P 500 Futures is up 0.15% on the day, pointing out to a positive opening in the major US equity indexes.

Technical levels to watch for

XAU/USD

Overview
Today last price 1494.08
Today Daily Change -8.67
Today Daily Change % -0.58
Today daily open 1502.75
 
Trends
Daily SMA20 1474.93
Daily SMA50 1430.91
Daily SMA100 1361.48
Daily SMA200 1321.66
Levels
Previous Daily High 1507.95
Previous Daily Low 1496.68
Previous Weekly High 1534.4
Previous Weekly Low 1481
Previous Monthly High 1452.72
Previous Monthly Low 1382.02
Daily Fibonacci 38.2% 1500.98
Daily Fibonacci 61.8% 1503.64
Daily Pivot Point S1 1496.97
Daily Pivot Point S2 1491.18
Daily Pivot Point S3 1485.69
Daily Pivot Point R1 1508.24
Daily Pivot Point R2 1513.73
Daily Pivot Point R3 1519.52

 

 

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