Gold Price Analysis: US Treasury yields above 1.75% to weigh on XAU/USD

Despite some sharp swings witnessed earlier last week, key levels for gold remain unharmed. The next significant XAU/USD move depends on US T-bond yields, FXStreet’s Eren Sengezer reports.

See – Gold Price Analysis: XAU/USD to hover around $1850 by end-March 2022 – Deutsche Bank

Key quotes

“Several members of the FOMC, including Chairman Powell, will be delivering speeches on Monday and later in the week. Powell is unlikely to change his tone only a few days after the policy meeting but market participants will keep a close eye on bond yields. The benchmark 10-year US T-bond yield seems to have met strong resistance at 1.75% and a break above that level could provide a boost to the USD and weigh on gold.”

“On Thursday, the US Bureau of Economic Analysis will publish its final reading of the fourth-quarter Gross Domestic Product (GDP) growth. More importantly, the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, will be looked upon for fresh impetus. The market consensus points to an unchanged reading in the Core PCE Price Index at 1.5% on a yearly basis in February. The USD could benefit from a higher-than-expected print and vice versa.”

“On the upside, the first hurdle is located at $1,745 (Fibonacci 38.2% retracement of the Feb. 2-Mar. 8 downtrend). If XAU/USD manages to clear that resistance, the next target could be seen at $1,767 (Fibonacci 50% retracement) ahead of $1,790 (50-day SMA, Fibonacci 61.8% retracement).”

“Support could be seen at $1,720 (Fibonacci 23.6% retracement) and $1,700 (Mar. 12 low, psychological level).”