- Gold fell to 4.5-month low yesterday as rising Treasury yields put a bid under the US dollar.
- The double top reversal in gold weekly chart suggests the tide has turned in favor of the bears.
Gold (XAU/USD) fell to $1,288 in the US session yesterday - the lowest level since Dec. 28 as the US dollar strengthened on the back of rising Treasury yields.
As of writing, the metal is changing hands at $1,291/Oz - down 5.4 percent from the recent high of $1,365.
The US 10-year treasury yield rose to 3.09 percent yesterday - its highest level since 2011. The resulting widening of the yield differentials pushed the greenback higher across the board. The dollar index, which tracks the value of the greenback against majors, rose to fresh 2018 high of 93.46.
The combination of rising bond yields and a strong US dollar weighed heavily on the "zero-yielding yellow metal".
Gold technical outlook - double top breakdown in weekly chart
Gold fell below $1,302 (neckline support), confirming a double top bearish reversal as anticipated. The bearish breakdown has opened the doors for a sell-off to $1,240 (double top reversal target as per the measured height method).
In the short-run, the 100-week moving average (MA) located t $1,277 may offer support. Meanwhile, on the higher side, $1,302 (former support turned resistance) is a key level to watch out for in the short-run.
|TREND INDEX||OB/OS INDEX||VOLATILY INDEX|
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.