Gold pressured with eyes on $1313 before YTD lows
- Gold: bears are in control below the 1340 level as dollar spikes.
- Gold: US yields are making a base on the 3% handle and traders take up the offers.
With US yields on the march again, Gold is currently trading at $1,320, pressuring the 21-W SMA and the 100-D SMA to the downside, having met a high of $1,332.24 and a low of $1,318.71 so far on the day while changing hands below the rising support line as stocks pare opening losses on Wednesday.
Gold has been capped at 1$,332.64 this week in the minor recovery attempt of the broader bear trend from 1$,355 territories. The yellow metal has now extended below the $1,322 previous lows for the week so far and is printing the lowest levels since 21st March.
DXY and US yields in higher ranges
The moves come as the US dollar takes on fresh highs between a higher range of 90.7500-91.2410 (DXY) today. USten year yields are looking to base on the 3% and have made a fresh high in the higher range of 2.99-3.03%, (eyes are also on 2yr and 10-yr spread below 50). This is fueling demand for the greenback and gold nine times out of ten will negatively correlate with such flows of funds, (in the short term at least). However, with the 2/10 year spread below 50, some are expecting a recession in the US economy to follow, with a wobble in stocks of late and the Fed on course for hiking rates until something goes wrong, gold is seen as a hedge against inflationary pressures, a falling dollar and in times of recession, gold will attract safe haven flows.
Gold levels
1313 is the next key downside target before a test of the 1302/05/08 area. 1302.77 is the YTD low. Daily RSI is backing the bearish bias and is not in oversold territory yet. The 100-D SMA is acting as a support while pressures continue to mount below the 10-4hr SMA at 1326. On the flipside, a break of the 50-4hr SMA at 1339 will bring the price back into positive territory and to the trend line support/resistance level at 1340. The hard resistance is located in the 1,354/57 zone.