Gold, Bond Yield, US Dollar Technical Analysis: Bullish Trends Amid Geopolitical Tensions

The US dollar index (DXY) continues bullish momentum after recent weakness. This bullish momentum is driven by investor optimism around the resilience of the US economy and elevated inflation expectations. Commentary from Federal Reserve (Fed) officials, including New York Fed President John Williams and Boston Fed President Susan Collins, suggested a cautious approach to further rate cuts. Despite their dovish stance, the market’s focus on inflationary pressures and potential policy adjustments has supported the Greenback. Investors are closely monitoring upcoming Fed speeches for further insights into the trajectory of interest rates.

Gold (XAU) extended its rally after rebounding from the support of $2560 as safe-haven demand strengthened. Concerns over geopolitical tensions, including Russia’s lowered threshold for nuclear strikes, continue to underpin demand for gold. A higher US dollar capped some gains for gold, but the overall risk-off sentiment and haven flows provided strong support. Gold also faces competition from Bitcoin, as significant inflows into Bitcoin ETFs coincide with outflows from gold ETFs, reflecting a shift in investor preferences.

On the other hand, US Treasury yields remain elevated, reflecting cautious optimism about the US economy. Persistent concerns about inflation and potential fiscal expansion have kept yields high despite dovish signals from some Fed officials. Higher yields challenge the appeal of gold while supporting the US dollar’s rebound. This interplay between monetary policy expectations and market sentiment is central to ongoing bond and currency market dynamics.

Gold (XAU) Technical Analysis

Gold Daily Chart – Breakout above 50 SMA

The daily gold chart indicates the beginning of the next surge as tensions between Ukraine and Russia escalate. The strong rebound from the black trend line near the $2,560 level suggests that prices will rise further toward the year’s end. Additionally, the price closing above the 50-day SMA reinforces the bullish outlook.

With the price above the 50-day SMA, the RSI has also closed above the midline, further supporting the potential for upward momentum. Moreover, previous rebounds from the 100-day SMA within the ascending channel have historically marked significant lows in gold prices, indicating a strong technical foundation for the current trend.

Gold 4-Hour Chart – Price Strength

The 4-hour chart for the gold market shows a rebound after forming a bottom at the pivotal level of $2,560. The consolidation around $2,560 before the strong surge indicates that the gold market is poised to advance. Geopolitical tensions further support this upward momentum.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Resistance

The daily chart for the Treasury Note Yield shows that the price is consolidating at the one-year trend line. This consolidation at resistance highlights the market’s strength. A break above 4.47% could trigger the next strong upward move.

10-Year Treasury Note Yield Hourly Chart –Ascending Channel Pattern

The 4-hour chart also shows upward momentum within the ascending channel. Consolidating the 10-year Treasury Yield at the resistance line indicates strong bullish potential. The emergence of a double-bottom pattern within this structure further strengthens the bullish outlook. A break above 4.47% would breach the black dotted trend line and likely extend the upward momentum.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Strength at Resistance

The daily chart for the US dollar index shows that the index is consolidating around the 107 resistance level. This resistance is significant and makes the ongoing consolidation expected. However, a break above 107.40 could increase the index and initiate a long-term bullish move. The escalating tensions in the Ukraine-Russia war contribute to uncertainty in the US dollar index and currency pairs.

US Dollar 4-Hour Chart – Ascending Channel

The 4-hour chart for the US dollar index shows an ascending channel, with the price consolidating within this pattern. The RSI trades above the midline and indicates positive strength in the US dollar index.