Gold Keeps Moving Lower As Treasury Yields Rise

Key Insights

• Treasury yields are testing new highs, which is bearish for gold. 
• Traders are focused on the Fed Interest Rate Decision, which will be released tomorrow. 
• A move below $1850 will push gold towards the support level at $1830.

Gold Remains Under Pressure

Gold is moving towards the support level at $1850, while Treasury yields are testing new highs.

Yesterday, the yield of 30-year Treasuries settled above the psychologically important 3.00% level and moved towards the next resistance at 3.05%. The yield of 10-year Treasuries is also testing the 3.00% level.

Treasury yields are moving higher ahead of the Fed Interest Rate Decision, which will be released tomorrow. Bond traders bet that Powell’s comments will be hawkish. It looks that markets expect that the Fed is ready to aggressively reduce the size of its balance sheet. Such policy will push yields higher, which will be bearish for gold that pays no interest.

Not surprisingly, VanEck Gold Miners ETF remains under pressure in the current market environment. As gold prices keep moving lower, gold mining stocks cannot find sufficient support. In case gold manages to get below the $1850 level during today’s trading session, the sell-off in GDX will continue.

Technical Analysis

Gold is currently trying to get below the support level at $1850. If gold declines below this level, it will head towards the next support, which is located at $1830.

A successful test of the support at $1830 will open the way to the test of the next support at $1815. In case gold moves below this level, it will head towards the support level at $1800.

On the upside, the previous support level at $1865 will serve as the first resistance level for gold. In case gold gets above this level, it will head towards the next resistance, which is located at $1880. A successful test of the resistance at $1880 will open the way to the test of the resistance at $1890.

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