Gold (XAU/USD) has struggled in recent days following the latest surge in US Treasury yields. Analysts at Standard Chartered see strong support for the yellow metal at $1765 followed by the $1690 mark.
“Bond yields are unlikely to drive further gains in gold. The Fed will likely welcome the rise in inflation expectations under its Average Inflation Targeting framework. This means a further rise in real yields could be harder to come by.”
“While USD has been resilient in recent weeks, a resolutely accommodative Fed in the face of rising growth and inflation expectations is likely to be negative for the USD over the next 6-12 months. This can be a positive driver for gold, helping it still deliver absolute gains.”
“Technicals are admittedly weak, given the formation of a ‘death cross, which increases the risk of an unwind of stale longs built up over the past year. In terms of momentum, we are in oversold territory; hence, some consolidation is likely near-term. Key supports are at $1765 and $1680-1690.”
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