Gold has been contained in a sideways range from March, with reduced sensitivity to the USD, which has steadily appreciated from May. Strategists at Credit Suisse are on high alert for a potentially significant top in XAU/USD, which would open up the $1,565/61 zone.
Rising US Real Yields seen as a major negative driver for gold
“Whilst we believe further USD strength will be a headwind for gold, a key driver for remains US Real Yields. Our base case remains that US Real Yields are in the process of establishing yield bases and with rising Real Yields seen as a major negative driver for the yellow metal, we remain on high alert for a potentially significant top and breakdown in XAU/USD.”
“Below support at $1,759/54 is needed to clear the way for a retest of major support at $1,691/77 – the key lows for the year from March, April and August.”
“A break below $1,691/77 would see a large top and also a bearish ‘triangle’ continuation pattern established to mark a significant change of trend lower. If confirmed, we would expect this to act as the catalyst for a fall to the 50% retracement and 200-week average at $1,565/61 initially.”
“Whilst we would expect the $1,565/61 zone to hold at first, big picture, we would see scope for an eventual fall to $1,452/40.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.