Gold: Probing 50-hour MA amid treasury yield curve steepening

Gold is mildly bid at press time near the 50-hour moving average hurdle.
The American Dollar is finding little love despite the treasury yield curve steepening, a sign of fading recession fears.

Omkar Godbole FXStreet Contributor

Gold is looking to move back above the 50-hour moving average, currently at $1,282 amid the yield curve steepening and a decline in the US dollar.

The spread between the yields on the US 10-year treasury note and the two-year Treasury note rose to 24 basis points earlier today, the highest level since Nov. 29, and is currently seen at 23 basis points.

Put simply, the yield curve is now the steepest since Nov. 29, a sign of fading US recession fears. Even so, gold, a safe haven asset, is pushing against the 50-hour MA hurdle, possibly due to weakness in the greenback.

The Dollar Index (DXY), which tracks the value of the greenback against major currencies, is currently trading at a five-day low of 97.980, representing a 0.10 percent drop on the day.

Both the DXY and gold ended Monday with losses, which is somewhat surprising, as the official data had shown US consumer spending increased by the most in more than 9-1/2 years in March, the official data showed. The 10-year yield almost five basis points to 2.542 percent.

While the Dollar's decline goes unexplained, the drop in the yellow metal was likely associated with the five basis point rise in the 10-year treasury yield to 2.54 percent.

Gold Technical Levels

1. R3 1293.25
2. R2 1290.05
3. R1 1284.58
PP 1281.38
1. S1 1275.91
2. S2 1272.71
3. S3 1267.24

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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