Gold Price Forecast: XAU/USD back under $1800 as markets extend sell-off
- XAU/USD retreats more than $10 from daily highs.
- Wall Street indices down more than 2%.
- US yields at lowest in two weeks, 10-year at 1.50%.
Gold prices are up for the day but off highs. XAU/USD jumped to $1815 during the European session but then turned to the downside, pulling back under 1800$. The risk aversion environment kept gains limited and favoured the retreat.
US Treasuries are sharply higher on the back of risk aversion. The US 10-year is at the lowest since November 10 at 1.49%, after being near 1.70% two days ago; the 30-year is down 6% at 1.84%.
Concerns about the new COVID-19 variant weighed on market sentiment and is looking to affect monetary policy expectations. The restrictions announcements across Europe pushed equity and crude oil prices sharply to the downside.
Initially, XAU/USD reacted to the upside, boosted by lower US yields. The rally was limited, and as of writing, it is retreating, affected by the global sell-off and a mixed US dollar. A firm recovery above $1810 could remove the negative tone in the short term; while a daily close under $1780 would suggest more losses ahead.
Technical levels
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.
