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
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
