Gold Price Forecast: XAUUSD backs away from $1800 as US yields soar
|- Treasury bonds decline even after another reading below expectations of US inflation.
- Gold fails to rise above $1800 and correct lower.
- Immediate support is seen at $1785, followed by $1774.
Gold turned negative for the day after a reversal from near $1800. XAUUSD peaked at $1799 during the American session and then turned to the downside, falling toward $1785.
Gold not shining
Data released on Thursday showed the Producer Price Index in the US dropped by 0.5% in July, and the annual rate fell to 9.8%, against expectations of a 0.2% monthly advance. On Wednesday, it was reported the Consumer Price Index was unchanged in July against expectations of a 0.2% gain. The decline in inflation weighed on the US dollar.
Market participants still expect the Federal Reserve to hike rates by at least 50 basis points at the September meeting. However, US yields are up even amid the probability of an inflation peak in the US. The US 10-year yield is up 1.90% at 2.83%, while the 2-year is at 3.20%, both at the highest level in almost a week.
The increase in US yields limited the upside in gold. XAU/USD’s inability to hold above $1800, even after the recent US data, rises doubts about the rally. The immediate support is seen at $1785 followed by the weekly opening at $1774. If the yellow metal consolidates above $1800 more gains seem likely.
Technical levels
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