Gold Prices Edge Higher as Yields Surge

Key Insights

• Gold prices edged higher
• The Dollar rose following Powells Comments
• U.S. Treasury yields surged to 30-month highs

Gold prices moved higher despite a stronger dollar and higher yields. Fed Chair Fed said on Monday that inflation is rising and that they might be behind the curve. The market is now expecting higher rates to battle inflation.

Powell said that the Fed might need 50-basis point hikes to battle inflation. The tone was more hawkish than previous as the Fed Chair seems encouraged by how the markets took the 25-basis point hike last week. Powell said that the risk of long-term inflation expectations continues to increase, and the Ukraine War has added fuel to the fire.

Technical Analysis

Gold moved slightly higher after dropping last week. Resistance is seen near the 10-day moving average at $1,961. Support is seen near the 50-day moving average at 1,878. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal.

The medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).