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The yield on 10-year US government bonds has updated its annual maximum. Gold is under pressure.

Gold is trading lower today despite the weakening of the dollar. Investors are reacting to rising US Treasury yields. At the auctions in Asia, the yield on 10-year government bonds updated its annual high and rose above 1.4%. Government bonds have a relatively stable guaranteed percentage of returns, so gold is becoming a less attractive asset for traders for long-term investments.

Additional pressure on the precious metal is exerted by the situation on stock markets. The main indices are showing a fairly steady growth after the comments of Jerome Powell and the general market optimism regarding the prospects for the global economy.

On Wednesday, the head of the FRS once again announced that the regulator does not intend to tighten monetary policy until the situation in the economy improves significantly. He also allayed investors' fears about the increase in inflationary pressures. Powell noted that the Fed will only respond to this if inflation rises strongly and sustainably above the target.

In general, the market is now quite optimistic about the prospects for the development of the world economy. Large-scale COVID-19 vaccination programs in many countries have already begun to show results. The incidence rate is declining. On the eve of the Food and Drug Administration of the United States announced that in the near future, permission may be granted for the use of another vaccine against COVID-19, which was developed by Johnson & Johnson. The advantage of this vaccine is that it requires a single dose.

Despite the decline in gold, other precious metals are now holding in the green trading zone.

The economic calendar today will focus on news from the United States. Durable goods orders, Q4 GDP data, pending real estate sales index and weekly statistics on new jobless claims are expected to be published.

On the chart, yesterday the price dropped below the local support at 1795.00, while a fairly strong resistance level was formed around the 1810.00 level. As a priority, we consider the scenario with a price decline towards the level of 1780.00.

  • Resistance levels: 1810.00, 1825.00, 1845.00.
  • Support levels: 1780.00, 1765.00, 1750.00.

The main scenario is a pullback to 1810.00 and a fall to 1780.00.

An alternative scenario is a decline to 1780.00 from current levels.

The current fundamental outlook is neutral. We consider shorts on a pullback to the 1810.00 mark.

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