Gold Price Forecast: XAU/USD volatile, between stronger Dollar and lower Treasury yields
- Gold rebounds despite a stronger US Dollar.
- Falling US Treasury yields are helping the yellow metal.
- XAU/USD remains under the 20-day SMA, keeps avoiding daily close under $1.980.
Gold price rebounded sharply during the last hour, rising more than $10. XAU/USD bottomed at $1,975 and then jumped to $1,994. As of writing, it trades at $1,987 marginally lower for the day, on a volatile session. Despite the big swings, price remains in a recent familiar range.
Gold price rebound is losing momentum as the US Dollar prints fresh daily highs across the board. The DXY is up by 0.35%, trading at 101.70. At the same time, US Treasury yields are falling again. The US 10-year yields stands at 3.43% and the 2-year at 4.03%, both at two-week lows.
The combination of a stronger US Dollar and lower Treasury yields is favoring large swings in XAU/USD. Incoming economic data from the US, particularly Q1 GDP and consumer inflation on Thursday, could add fuel to volatility.
On a wider perspective, Gold is showing some signs of weakness as it remains below the 20-day Simple Moving Average (SMA) which stands near $2,000. At the same time, it has avoided a daily close under $1,980. A close under the mentioned level would point to an extension of the bearish correction.
XAU/USD Daily chart
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.
