Gold Remains Stuck Near The $1935 Level

Key Insights

• Gold tries to gain more ground despite rising Treasury yields.
• Geopolitical uncertainty remains the key bullish catalyst for gold. 
• Gold needs to settle above $1935 to get to the test of the next resistance at $1950. 

Gold Tries To Continue Its Rebound

Gold continues its attempts to settle above the resistance at $1935 despite rising Treasury yields.

There are no positive news from negotiations between Russia and Ukraine, which is bullish for safe-haven assets like gold. At the same time, the recent hawkish comments from Fed Chair Jerome Powell have provided significant support to the U.S. dollar and pushed Treasury yields higher. A combination of stronger dollar and higher Treasury yields is bearish for gold.

As a result, gold prices have stabilized near $1935 as strong demand for safe-haven assets amid geopolitical uncertainty was offset by the negative impact of higher yields and stronger dollar.

In the near term, the dynamics of Treasury yields will likely have a significant impact on gold price dynamics. While the yield of 2-year Treasuries moved from the 0.74% level at the end of 2021 to 2.19%, it remains well below the current Inflation Rate, so monetary conditions remain stimulating.

It is obvious that the Fed will be forced to be more aggressive in the upcoming months, which may push yields even higher and put more pressure on gold.

Technical Analysis

Gold is trying to settle above the resistance level at $1935. If gold manages to settle above this level, it will move towards the next resistance at $1950.

A move above the resistance level at $1950 will open the way to the test of the resistance at $1975. If gold manages to settle above this level, it will head towards the resistance at $2000.

On the support side, the nearest support level for gold is located at $1915. In case gold declines below this level, it will head towards the next support near the 50 EMA at $1900. A move below the 50 EMA will push gold towards the support at $1880.

For a look at all of today’s economic events, check out our economic calendar.