Gold Price Analysis: XAU/USD tumbles hitting levels under $1720 as US yields rebound
|- A reversal in US yields sent metals sharply to the downside.
- XAU/USD erased daily gains, weakening the recovery.
Gold prices dropped more than $20 from the daily high and bottomed at $1719 during the American session. The decline took place as US yields bounced to the upside. The recovery of XAU/USD is being challenged.
After the European Central Bank meeting, following Lagarde’s press conference and ahead of the results of the 30-year bond auction, US yield turned to the upside. The 10-year rose from a one-week low at 1.475% to 1.546%. The move offered some support to the dollar that trimmed losses only modestly.
The greenback remains under pressure amid risk appetite. The Dow Jones is by 0.84%, at record highs, while the Nasdaq jumps 1.99%. The improvement in market sentiment is not helping the demand for gold and silver.
XAU recovery under pressure
Earlier on Thursday, XAU/USD peaked at $1740, a weekly high before turning to the downside. Price is testing the $1720 support area; a firm break would expose the next support around $1708 that protects the $1700 area. On the upside, now $1731 is the level to regain for gold to take back the initiative and the recovery momentum.
Is it not clear if the current move is a correction of the current recovery from $1676 (Mar 9 low) or if it is more likely the end of the correction of the medium-term bearish move.
Technical levels
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