Gold Price Analysis: XAU/USD sellers attack November 2020 low as US Treasury yields nurse losses
|- Gold refreshes three-month low, defies the previous day’s bounce off $1,768.
- Risks dwindle following downbeat US data, fears of inability to tame the virus strains.
- Absence of major update on the US covid relief stimulus also challenges the mood.
- Treasury Secretary Yellen reiterates the need for stimulus package, US activity numbers eyed.
Gold stands on a slippery ground while refreshing the 12-week low to $1,766.56, currently down 0.41% around $1,767, during Friday’s Asian session. The yellow metal bounced off $1,768 the previous day amid US dollar weakness and a pullback in the US treasury yields.
However, the recent corrective moves in the greenback and the sustained strength of the US Treasury yields seem to have weighed on the yellow metal.
The US dollar index (DXY) nurses the heaviest losses in over a week with its latest bounces off 90.54 to 90.57. Further, the US 10-year Treasury yields also regained the upside momentum towards 1.30% by press time.
The market sentiment remains sluggish as US policymakers jostle over the much-awaited coronavirus (COVID-19) aid package even as the latest chatters suggest the results next week. While highlighting the need for the stimulus, US Treasury Secretary Janet Yellen said that it is important to have a big rescue package. Also on the negative side could be her comments suggesting the continuation of the US-China tussles. Elsewhere, the fears that the covid variants are resistant to the vaccines also weigh on the mood.
While tracking the catalysts, stocks in the Asia-Pacific attack remain depressed while commodities fail to keep the previous day’s recovery moves.
Looking forward, a light calendar can keep directing commodity traders to follow the US dollar, Treasury yield moves ahead of the American activity numbers for February. Though, any surprise announcement concerning the US virus relief package and/or virus/vaccine could offer fresh direction to the yellow metal.
Technical analysis
Thursday’s Doji formation near the multi-day low warrants the gold bears to break $1,968 before directing the quote further to the south. Meanwhile, the February 04 low of $1,785 and the $1,800 threshold guard the bullion’s immediate upside.
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.