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Dollar increases pressure on gold

At the beginning of the Asian trading session, gold rose slightly, after which it resumed its downward movement against the backdrop of a strengthening dollar and rising yields of American Treasuries.

The market continues to closely monitor the dynamics of the movement of the American Treasuries. Amid large-scale stimulus measures, many investors are still betting on accelerating inflation in the US, which may lead to an earlier withdrawal of the Fed's stimulus policy than previously predicted. At the same time, traders ignore the statements of the US Treasury Secretary Janet Yellen, who tried to calm the market and said on Sunday that inflationary risks in the US remain insignificant and controllable. Yellen also noted that government bodies have a wide range of tools to fight inflation, if these risks are realized.

Despite Yellen's statements, the sale of US government bonds continues. The yield on 10-year securities is now at 1.634% and today may renew the annual maximum set last week at 1.642%.

Following the yield on government bonds, the US dollar continues to strengthen. Against this background, gold and other precious metals are under strong pressure.

On the chart, we mark an unsuccessful attempt to break through the 1727.00 mark. Within the day, we are waiting for the development of the downward movement in the direction of the level of 1700.00.

  • Resistance levels: 1727.00, 1741.00, 1760.00.
  • Support levels: 1700.00, 1680.00, 1670.00.

The main scenario is a decline to 1700.00.

An alternative scenario is a breakdown of resistance at 1727.00 and growth to 1741.00.

The current fundamental background is negative. We consider shorts from the level of 1727.00.

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