Gold Price Analysis: XAU/USD sellers attack November 2020 low as US Treasury yields nurse losses
- Gold refreshes three-month low, defies the previous day’s bounce off $1,768.
- Risks dwindle following downbeat US data, fears of inability to tame the virus strains.
- Absence of major update on the US covid relief stimulus also challenges the mood.
- Treasury Secretary Yellen reiterates the need for stimulus package, US activity numbers eyed.
Gold stands on a slippery ground while refreshing the 12-week low to $1,766.56, currently down 0.41% around $1,767, during Friday’s Asian session. The yellow metal bounced off $1,768 the previous day amid US dollar weakness and a pullback in the US treasury yields.
However, the recent corrective moves in the greenback and the sustained strength of the US Treasury yields seem to have weighed on the yellow metal.
The US dollar index (DXY) nurses the heaviest losses in over a week with its latest bounces off 90.54 to 90.57. Further, the US 10-year Treasury yields also regained the upside momentum towards 1.30% by press time.
The market sentiment remains sluggish as US policymakers jostle over the much-awaited coronavirus (COVID-19) aid package even as the latest chatters suggest the results next week. While highlighting the need for the stimulus, US Treasury Secretary Janet Yellen said that it is important to have a big rescue package. Also on the negative side could be her comments suggesting the continuation of the US-China tussles. Elsewhere, the fears that the covid variants are resistant to the vaccines also weigh on the mood.
While tracking the catalysts, stocks in the Asia-Pacific attack remain depressed while commodities fail to keep the previous day’s recovery moves.
Looking forward, a light calendar can keep directing commodity traders to follow the US dollar, Treasury yield moves ahead of the American activity numbers for February. Though, any surprise announcement concerning the US virus relief package and/or virus/vaccine could offer fresh direction to the yellow metal.
Technical analysis
Thursday’s Doji formation near the multi-day low warrants the gold bears to break $1,968 before directing the quote further to the south. Meanwhile, the February 04 low of $1,785 and the $1,800 threshold guard the bullion’s immediate upside.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
