Gold Price Analysis: XAU/USD drops below $1,780 area as US T-bond yields rebound
- Gold lost its traction after climbing toward $1,800 on Friday.
- 10-year US Treasury bond yield is up nearly 2%.
- Latest PMI data from US underlined strong price pressures.
After rising to a daily high of $1,795 earlier in the day, the XAU/USD pair made a sharp U-tun and was last seen losing 0.3% on a daily basis at $1,778.
US T-bond yields turn north after PMI data
A decisive rebound witnessed in the US Treasury bond yields seems to be weighing on gold during the American trading hours. Currently, the benchmark 10-year US T-bond yield is up nearly 2% at 1.567%.
The data published by the IHS Markit revealed on Friday that the economic activity in the US private sector expanded at a record-high pace in April with the Composite rising to 62.2 from 59.7 in March. However, the underlying details of the publication revealed that producers were passing input price increases to clients at a growing proportion, reviving concerns over inflation.
Other data from the US showed that New Home Sales in March surged by 20.7%, compared to analysts' expectation for an increase of 12.8%.
In the meantime, the US Dollar Index stays deep in the negative territory around 91.00 after these data, helping XAU/USD limit its losses for the time being.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
