Gold Price Forecast: XAU/USD stays vulnerable amid rising US T-bond yields


  • XAU/USD struggles to stage a convincing rebound on Monday.
  • US 10-year US T-bond yield is closing in on multi-month highs.
  • XAU/USD eyes $1756 and $1750 as the next bearish targets.

Gold lost its traction after testing $1,800 on Thursday and ended up closing the week with small gains at $1,767. With the US Treasury bond yields continuing to push higher on Monday, XAU/USD is having a difficult time recovering its losses in a convincing way. As of writing, the pair was down 0.15% on the day at $1,765.

The benchmark 10-year US Treasury bond yield, which gained 4% and caused XAU/USD to fall sharply on Friday, is currently rising 2.85% on a daily basis at 1.619%. On October 11, the 10-year yield reached its strongest level since June at 1.636% and staged a deep correction in the first half of the previous week. With a daily close above that level, another leg higher could be witnessed and gold could come under renewed bearish pressure.

Meanwhile, the US Dollar Index, which tracks the greenback's performance against a basket of six major currencies, is moving sideways around 94.00 and limiting XAU/USD's downside for the time being. 

Moreover, the negative shift witnessed in risk sentiment following the disappointing third-quarter growth data from China earlier in the day seems to be allowing the precious metal to find some demand as a safe haven.

Nevertheless, investors are likely to continue to react to fluctuations in the US T-bond yields as the US economic docket will not be offering any high-tier data releases in the remainder of the day.

Gold near-term technical outlook

"The sellers eye the next support at $1760, where the SMA100 four-hour merges with the Bollinger Band one-day Middle," notes FXStreet Senior Analyst Dhwani Mehta. "If the bearish momentum accelerates, then the pivot point one-day S1 at $1756 will get challenged."

According to Mehta, $1765 is critical for gold buyers to initiate a meaningful recovery towards $1768, where the one-week Fibonacci 61.8% retracement is located.

Additional levels to watch for

XAU/USD

Overview
Today last price 1765.23
Today Daily Change -1.97
Today Daily Change % -0.11
Today daily open 1767.2
 
Trends
Daily SMA20 1760.22
Daily SMA50 1776.88
Daily SMA100 1797.93
Daily SMA200 1795.44
 
Levels
Previous Daily High 1796.5
Previous Daily Low 1764.9
Previous Weekly High 1800.62
Previous Weekly Low 1750.24
Previous Monthly High 1834.02
Previous Monthly Low 1721.71
Daily Fibonacci 38.2% 1776.97
Daily Fibonacci 61.8% 1784.43
Daily Pivot Point S1 1755.9
Daily Pivot Point S2 1744.6
Daily Pivot Point S3 1724.3
Daily Pivot Point R1 1787.5
Daily Pivot Point R2 1807.8
Daily Pivot Point R3 1819.1

 

 

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