Gold Slips Back Below The $1950 Level

Key Insights

• Treasury yields are moving higher after the pullback, which is bearish for gold. 
• Demand for safe-haven assets is not strong enough to offset the negative impact of rising yields. 
• A move below the $1950 level will push gold towards the support at $1935.

Gold Is Losing Ground As Treasury Yields Rebound

Gold is currently trying to settle back below the support at $1950, while Treasury yields are moving higher after yesterday’s pullback.

The yield of 10-year Treasuries faced significant resistance near the 3.00% level and declined towards 2.85%. Currently, the yield of 10-year Treasuries is trying to get to the test of the 2.90% level. A move above this level will push it closer to the recent highs, which will be bearish for gold. At this point, rising yields are the main bearish catalyst for gold and other precious metals.

Meanwhile, the recent trading action indicates that demand for gold-related assets remains strong. VanEck Gold Miners ETF managed to settle back above the $40 level during yesterday’s trading session. In case gold manages to stay above the $1950 level, VanEck Gold Miners ETF will have a good chance to develop additional upside momentum.

Technical Analysis

Gold continues its attempts to settle below the support level at $1950. In case gold manages to settle below this level, it will head towards the next support at $1935.

A successful test of the support at $1935 will lead to the test of the next support level, which is located at the 50 EMA at $1925. If gold moves below the $1925 level, it will gain additional downside momentum and head towards the support at $1915.

On the upside, a move above $1950 will push gold towards the resistance at $1965. If gold manages to settle above the resistance at $1965, it will head towards the next resistance level, which is located at $1975. A successful test of this level will open the way to the test of the resistance at the psychologically important $2000 level.

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