Gold Remains Stuck Near The Strong Resistance At $1975

Key Insights

• Treasury yields continue to pull back, which is bullish for gold. 
• However, gold faced material resistance near the $1975 level as some traders are taking profits after the recent upside move. 
• A successful test of the resistance at $1975 will open the way to the test of the next resistance level at $2000.

Gold Is Mostly Flat Despite Lower Treasury Yields

Gold continues its attempts to settle above the resistance at $1975 as the pullback in Treasury yields continues.

The yield of 2-year Treasuries declined from 2.60% to 2.30% in less than a week, which is not surprising after a huge move without any pullbacks. Meanwhile, the yield of 10-year Treasuries faced resistance near 2.80% and declined towards 2.65%.

Lower yields are bullish for precious metals, so the recent developments in U.S. government bond markets provided additional support to gold.

It should be noted that the U.S. dollar has recently moved lower against a broad basket of currencies, which served as a positive catalyst for gold.

Not surprisingly, VanEck Gold Miners ETF managed to settle above the $40 level and moved closer to the $41 level. In case gold settles above $1975 and moves closer to the $2000 level, VanEck Gold Miners ETF will get above $41.

Technical Analysis

Gold continues to test the resistance level at $1975. If gold settles above this level, it will head towards the next resistance level, which is located at $2000.

A successful test of the resistance at $2000 will open the way to the test of the next resistance level at $2020. In case gold manages to settle above the resistance at $2020, it will continue its upside move and head towards the resistance at $2050.

On the support side, the nearest support level for gold is located at $1965. In case gold declines below the support at $1965, it will head towards the next support, which is located near the 20 EMA at $1950. A move below the 20 EMA will open the way to the test of the support at $1935.

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