Gold Pulls Back As Treasury Yields Rebound

Key Insights

• Higher Treasury yields put pressure on gold, and traders will keep a close eye on U.S. government bond markets. 
• Traders will also stay focused on geopolitical developments. 
• A move below the support at the 20 EMA will push gold towards the support level at $1915.

Gold Is Moving Lower Ahead Of The Weekend

Gold is trading near the support level at the 20 EMA at $1935, while Treasury yields are trying to gain more ground.

The recent increase in Treasury yields has served as a significant negative catalyst for gold. Treasury yields have pulled back from their recent highs, but they remain close to these levels. A move above yearly highs will likely put more pressure on gold.

Negotiations between Russia and Ukraine continue, and markets are trying to evaluate when the final deal could be reached. At this point, there is no rush into safe-haven assets, but the situation may change quickly in case the consensus deal is not reached in the upcoming days. This scenario would be bullish for gold and other safe-haven assets.

Technical Analysis

Gold has recently made an attempt to settle above the resistance at $1950 but failed to develop sufficient upside momentum and pulled back. Currently, gold is trying to settle below the nearest support level at the 20 EMA at $1935.

In case gold manages to settle below $1935, it will head towards the next support level, which is located at $1915. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If gold settles below the support at $1915, it will head towards the support level at $1900. A successful test of this level will lead to the test of the support at the 50 EMA near $1890.

On the upside, gold needs to settle above the resistance at $1950 to continue its rebound. The next resistance level for gold is located at $1975. In case gold climbs above the resistance at $1975, it will head towards the psychologically important $2000 level.

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