Gold Price Drops as Treasury Yields Rise, Will XAU/USD Fall Further?

Gold Price Outlook:

Gold Price Drops as Treasury Yields Rise, Will XAU/USD Fall Further?

After encountering resistance last week, gold has since reversed lower and may continue to fall as Treasury yields rise. With the US10y Treasury yield breaching 1.3% for the first time since late February 2020 earlier this week, investors are faced with rising risk-free rates. As gold has no inherent yield, gaining exposure to US government bonds becomes an attractive prospect for many investors as Treasury yields rise amid reflation hopes.

Gold (XAU/USD) Price Chart: Daily Time Frame (March 2020 – February 2021)

The negative correlation between the two assets is easily visible and it suggests as long as Treasury yields continue to rise, gold may suffer. With that in mind, the technical landscape of XAU/USD may see losses accelerate as the yellow metal nears a key level.

Gold (XAU/USD) Price Chart: Daily Time Frame (January 2020 – February 2021)

With yields rising and technical levels under fire, there is little to suggest the downtrend will suddenly give way to a bullish breakout. Suffice it to say, the medium-term outlook remains lower for the time being – further evidenced by the “death cross” formationin January.

In the shorter-term, however, gold may require consolidation before continuing lower in earnest. In the event of a recovery effort, initial resistance will reside at the $1,800 mark followed by $1,838. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

This content was originally published here.

Rate:

0 out of 5 stars(0 ratings)

Subscribe to Our Newsletter

money for gold logo

Learn About Buying and Selling Gold for the Best Prices

Get the latest news and expert advice on Gold!

We don’t spam! Read our privacy policy for more info.

Leave a Reply

Related

Shutterstock.comBy Tapan Patel Commodity prices traded lower with most of the commodities in the non-agro segment…

Read more

Shutterstock.comGlobally, spot gold eased 0.2 per cent at $1,734.16 per ounce, having dropped to their lowest since…

Read more

Share Great Content for Our Resource Section

About

MoneyForGold.com is a resource site created for those looking to sell their personal collection of gold - whether it’s jewelry, coins, bars, antiques, etc., anything made from gold can be sold for quick cash. We encourage visitors to signup and share quality “Money For Gold” resources.

Have a question or comment? Email us at: contact@moneyforgold.com

Navigation
MoneyForGold.com
50% Complete

Learn Where to Sell Your Gold for the Best Prices

Free 3-Minute, Practical Stories Delivered to You Everyday!
Buy, Sell, Invest in Gold Today!