Gold Price Analysis: XAU/USD tumbles hitting levels under $1720 as US yields rebound

A reversal in US yields sent metals sharply to the downside.
XAU/USD erased daily gains, weakening the recovery.

Matías Salord FXStreet

Gold prices dropped more than $20 from the daily high and bottomed at $1719 during the American session. The decline took place as US yields bounced to the upside. The recovery of XAU/USD is being challenged.

After the European Central Bank meeting, following Lagarde’s press conference and ahead of the results of the 30-year bond auction, US yield turned to the upside. The 10-year rose from a one-week low at 1.475% to 1.546%. The move offered some support to the dollar that trimmed losses only modestly.

The greenback remains under pressure amid risk appetite. The Dow Jones is by 0.84%, at record highs, while the Nasdaq jumps 1.99%. The improvement in market sentiment is not helping the demand for gold and silver.

XAU recovery under pressure

Earlier on Thursday, XAU/USD peaked at $1740, a weekly high before turning to the downside. Price is testing the $1720 support area; a firm break would expose the next support around $1708 that protects the $1700 area. On the upside, now $1731 is the level to regain for gold to take back the initiative and the recovery momentum.

Is it not clear if the current move is a correction of the current recovery from $1676 (Mar 9 low) or if it is more likely the end of the correction of the medium-term bearish move.

Technical levels

XAU/USD

Overview
Today last price	1724.08
Today Daily Change	-1.46
Today Daily Change %	-0.08
Today daily open	1725.54

Trends
Daily SMA20	1759.71
Daily SMA50	1818.68
Daily SMA100	1842.47
Daily SMA200	1859.9

Levels
Previous Daily High	1726.37
Previous Daily Low	1708.22
Previous Weekly High	1759.98
Previous Weekly Low	1687.37
Previous Monthly High	1871.9
Previous Monthly Low	1717.24
Daily Fibonacci 38.2%	1719.44
Daily Fibonacci 61.8%	1715.15
Daily Pivot Point S1	1713.72
Daily Pivot Point S2	1701.89
Daily Pivot Point S3	1695.57
Daily Pivot Point R1	1731.87
Daily Pivot Point R2	1738.19
Daily Pivot Point R3	1750.02

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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