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Gold in Asia rises amid declining yields on US bonds

On Monday, in Asia, the price of gold rose despite the positive dynamics of the dollar index. Precious metal reacts positively to the decline in US Treasury yields. The yield on 10-year bonds since the beginning of the day has declined from a high of 1.658% to 1.624%.

US Treasury Secretary Janet Yellen said Sunday that government spending on President Joe Biden's plans for infrastructure, jobs and families will be phased out over the next 10 years. With her statement, Yellen somewhat eased investors' fears about inflation.

Investors are also monitoring changes in the level of demand for physical gold. Physical gold was sold at a discount in Asia last week due to a sharp decline in demand in India as the COVID-19 pandemic continues to rage in the country. A new anti-record was recorded over the weekend, with the number of newly diagnosed cases exceeding 400,000. At the same time, gold consumption in China grew by 93.9% in the first quarter of 2021 compared to the same period last year.

Other metals are trading in different directions today. Silver is up by 0.4%, platinum is down by 0.1%, and palladium is trading near last week's close.

In the economic calendar, it is worth paying attention to the speech of the head of the Fed, Jerome Powell, and the publication of data on the PMI of the manufacturing sector in Germany and the United States.

The situation on the chart has not changed significantly. The price is holding in the horizontal channel 1766.00-1795.00, but lately bears are increasing pressure on the lower border of the sideways trend. Therefore, in the medium term, we can expect the price to break out of the sideways downward.

  • Resistance levels: 1774.00, 1795.00, 1810.00.
  • Support levels: 1766.00, 1747.00, 1722.00.

The main scenario is a decline from current levels below 1766.00.

An alternative scenario is a breakdown of resistance at 1774.00 and growth to 1795.00.

The current fundamental background is neutral. We consider shorts at the level of 1774.00.

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