Gold Prices Reverse Tuesday’s Gains as Treasury Yields Rise

Key Insights

• Gold Prices Reverse Tuesday’s Gains
• The Dollar tumbled, easing the safe-haven bid
• S. Treasury yields continued to climb
• The JOLT reports hit a record

Gold prices reversed course on Wednesday as stocks rallied, relieving some of the safe-haven bid. The 2-year yield surged higher and hit the highest levels since 2019. The war and how it is impacted the capital markets continue to take center stage, but markets are also focusing on the Fed, which has its monetary policy meeting next week. The U.S. Jobs opening and Labor Turnover report hit a record high in January.

On Wednesday, The Labor Department reported 11.3 million job openings in January in the United States, down slightly from the previous month’s revised 11.4 million, a record high. The number of times workers quit their jobs fell slightly to 4.3 million while hiring remained at 6.5 million at the start of the year.

Technical Analysis

Gold prices reversed Tuesday’s gains following the strong breakout earlier in the week. On Tuesday, gold prices fell just shy of the August 2020 highs near 2,075. Support is near the 10-day moving average that comes in near $1,952. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal.

Prices have moved out of the overbought territory. The RSI declined by printing a reading of 66, down from 81, reflecting decelerating positive momentum. Prices were overbought briefly but are now in the upper end of the neutral zone.

The medium-term momentum is positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is upward sloping, which likely points to upward prices.