Gold Settled In The $1950 – $1965 Range Despite Higher Treasury Yields

Key Insights

• Gold managed to settle above the $1950 level.
• Treasury yields continue to move higher, which puts some pressure on gold markets. 
• A move above the resistance at $1965 will push gold towards the next resistance at $1975.

Demand For The Safe-Haven Gold Stays Strong

Gold has settled in the range between the support at $1950 and the resistance at $1965, while Treasury yields keep moving higher.

The yield of 10-year Treasuries has already managed to get above the 2.80% level and is currently trying to settle above 2.83%. The yield of 30-year Treasuries has also settled above 2.80% and is testing the 2.85% level. Higher yields are bearish for gold that pays no interest.

However, the geopolitical situation remains tense, which supports demand for gold. At this point, traders are ready to ignore higher yields and stronger dollar, although it should be noted that the recent developments in U.S. government bond markets limit gold’s upside potential.

Yesterday, VanEck Gold Miners ETF made an attempt to settle above the $40 level but lost momentum amid broad sell-off in the stock market. Today, VanEck Gold Miners ETF should have a chance to get back to the $40 level in case gold stays in the $1950 – $1965 range.

Technical Analysis

Gold managed to settle above the resistance at $1950 and is trying to get to another test of the resistance level at $1965.

In case gold climbs above the resistance at $1965, it will head towards the next resistance level, which is located at $1975. A move above this level will push gold towards the resistance at $2000. If gold settles above this level, it will head towards the next resistance at $2020.

On the support side, the previous resistance at $1950 will serve as the first support level for gold. In case gold gets below this level, it will head toward sthe support at $1935. A successful test of the support at $1935 will open the way to the test of the next support level, which is located at the 50 EMA at $1915.

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