Gold (XAU/USD) plunged to its lowest level since June 2020 at $1,717 and lost more than 3% on a weekly basis. In the new week, a correction in US T-bond yields could help XAU/USD recover toward the $1,780 level, FXStreet’s Eren Sengezer reports.
Key quotes
“Investors are likely to remain focused on developments surrounding US Treasury bond yields. The 10-year US T-bond yield gained more than 35% in February alone and it's up nearly 50% since the beginning of the year but a significant hurdle is located around 1.5% level. A deep correction in yields could put the USD under heavy selling pressure and trigger a strong rebound in XAU/USD and vice versa.”
“Unless XAU/USD manages to make a daily close above the descending trend line coming from January 6, currently located around $1,780, sellers could look to remain in control. Above $1,780, next resistance is located $1,800 (psychological level/20-day SMA) ahead of $1,820 (static level).”
“The initial support could be seen at $1,717 (February 26 low) before $1,700 (psychological level). Below those levels, $1,680, which acted as strong support in April, May and June of 2020, is the next target.”
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