- Gold bears fight back control as US 10-year Treasury yields hit two-year highs.
- Russia-Ukraine crisis, aggressive Fed rate hike bets triggered the yields spike.
- Gold 2022 Outlook: Correlation with US T-bond yields to drive yellow metal.
The Fed policymakers have entered a blackout period ahead of next week’s FOMC decision. What is moving the US Treasury yields, dollar and gold then? With the return of full markets on Tuesday, investors brace for heightened tensions between Russia and Ukraine, causing the risk premium to explode and driving the benchmark US 10-year yields to a new two-year high of $1.85%. The US rates also jumped, sending the dollar higher, on speculation of aggressive Fed rate hike in March to the tune of 50bps.
Looking ahead, in absence of relevant US economic data due for release on Tuesday, the Fed sentiment and geopolitical tensions will continue to influence gold price. Higher yields tend to weigh on the non-interest-bearing gold price.
Gold Price: Key levels to watch
The Technical Confluences Detector shows that the gold price is testing the bullish commitments at $1,811, which is a powerful resistance of the SMA10 one-day and SMA100 four-hour.
The next support awaits at the 50-DMA of $1,808, below which a dense cluster of healthy cushions align at $1,804. At that point, the SMA200 one-day coincides with the Fibonacci 61.8% one-week and pivot point one-day S3.
The last line of defense for gold bulls is seen at $1,800, the Fibonacci 38.2% one-month.
On the flip side, the previous day’s low at $1,813 offers immediate resistance, followed by the intersection of the SMA5 and 10 four-hour.
Fibonacci 23.6% one-week at $1,820 will emerge as the next significant upside barrier.
Bulls will then challenge the previous day’s high at $1,823.
Here is how it looks on the tool
About Technical Confluences Detector
The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
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.