Long

Gold Slides as Treasury Yields Rise and Bond Market Resumes

Updated

During the early morning Asian session, the price of gold decreases as Treasury yields inched up, diminishing the allure of the precious metal, which does not yield interest. Edward Moya, a senior market analyst at Oanda, communicated via email that the temporary decline in the bond market poses a challenge for gold. He also mentioned that this situation might trigger additional sales of gold based on technical factors. As of now, the spot price of gold has dropped by 0.1%, resting at $1,910.87 per ounce.

XAUUSD BUY 1910- 1912💯💯

✅ TP1: 1916
✅ TP2: 1921

🛑 SL: 1905

Note

Meanwhile, WTI crude oil prices narrowly secured another increase, edging up by 0.5%. This marks the lengthiest unbroken streak of gains for the commodity since January 2022, spanning a period of 7 weeks. Simultaneously, the ascent of Treasury yields and a fortified US Dollar put pressure on gold prices, resulting in XAU/USD concluding at its lowest point since March.

Note

On Monday, gold prices experienced a decline to a point not witnessed in over five weeks. This drop coincided with a strengthening dollar and increased bond yields, occurring in anticipation of the release of the U.S. Federal Reserve's July meeting minutes later in the week. These minutes are expected to provide insights that could shape expectations regarding future interest rates.

Note

At 0119 GMT, spot gold experienced a 0.2% decrease, reaching $1,910.29 per ounce, marking its lowest point since July 7. Simultaneously, U.S. gold futures also underwent a 0.2% decline, settling at $1,942.60.

Note

Following Friday's data, U.S. bond yields advanced, propelling the dollar to its peak since July 7. The data revealed a slight surpassing of expectations in producer prices for July, driven by a robust recovery in the cost of services, marking its swiftest acceleration in almost a year.

Note

- Elevated interest rates and increased Treasury bond yields amplify the trade-off associated with retaining non-interest yielding gold, a precious metal valued in U.S. dollars.

- In August, there was a slight decline in U.S. consumer sentiment; however, a survey conducted on Friday indicated that Americans anticipate a gradual decrease in inflation for the upcoming year and beyond.

Note

XAUUSD SELL Scalp 1916- 1915💯💯

✅ TP1: 1912
✅ TP2: 1907

🛑 SL: 1920

Note

"The upcoming Fed minutes are expected to lean towards a hawkish stance, potentially exerting sustained pressure on gold. This could lead to a decline, with levels possibly reaching as low as $1,900 or even $1,880," Bennett commented.

Illustrating the waning investor attraction to gold, SPDR Gold Trust
GLD
, the largest exchange-traded fund backed by gold, reported that its holdings diminished to their lowest point since January 2020.

ForexGlobal

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