Gold: Bull breakout remains elusive as Treasury yields spike

Gold struggles to find acceptance above $1,350.
USD better bid, tracking a rise in Treasury yields.

Omkar Godbole FXStreet Contributor

Gold (XAU/USD) faded spike to $1,354 yesterday as the rise in the treasury yields put a bid under the US dollar.

As of writing, the yellow metal is changing hands at $1,342/Oz, representing a 0.30 percent drop on the day. Meanwhile, the dollar index (DXY) has hit an 11-day high of 89.74.

The US two-year treasury yield rose above 2.4 percent yesterday and extended gains further to 2.44 percent in Asia - its highest level since September 2008. Further, the 10-year treasury yield moved above 2.9 percent and looks set to scale the 3 percent mark soon.

Hence, the dollar may remain well bid against the zero-yielding safe haven yellow metal.

Gold Technical Levels

The bull flag breakout (close above $1,350) pattern has failed twice in the last ten days. So, the emboldened bears may push the metal down to $1,337 (ascending trendline support). A violation there would expose support lined up at $1,331 (50-day MA) and $1,329 (100-day MA).

On the higher side, the key levels to watch out for are: $1,355 (weekly high), $1,357 (March 27 high) and $$1,365 (April 11 high).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Neutral	High
1H	Bullish	Neutral	Shrinking
4H	Bearish	Neutral	High
1D	Bearish	Neutral	Shrinking
1W		Neutral	Shrinking
Updated Apr 20, 02:45 GMT

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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