Gold Stays Range-Bound As Treasury Yields Rise

Key Insights

• Higher Treasury yields put some pressure on precious metals. 
• Gold continues consolidation after the recent pullback.
• A move back above the $2000 level will push gold towards the resistance at $2020.

Traders Wait For Additional Catalysts

Gold remains stuck in the range between the support at $1975 and the resistance at $2000, while traders wait for new catalysts that could boost demand for safe-haven assets.

Global markets remain volatile. WTI oil has recently managed to settle back above $107 after an unsuccessful attempt to settle below the $105 level, while S&P 500 futures are moving lower in premarket trading.

Uncertainty persists, which is typically bullish for gold. However, it looks that gold markets may need more time to stabilize after the recent pullback before gold will be ready to gain upside momentum again.

I’d also note that the recent inflation reports from the U.S., which indicated that Inflation Rate increased by 7.9% year-over-year in February, pushed Treasury yields higher. The yield of 2-year Treasuries is currently trying to settle above 1.71%, while the yield of 10-year Treasuries is close to the 2.00% level. Higher yields may put some pressure on precious metals in the upcoming trading sessions.

Technical Analysis

Gold faced significant resistance near $2000 and continues to trade below this level. The nearest support level for gold is located at $1975. In case gold manages to settle below this support level, it will head towards the support at $1950.

A successful test of the support at $1950 will push gold towards the next support at the 20 EMA near $1940. If gold declines below the 20 EMA, it will gain additional downside momentum and head towards the support at $1915.

On the upside, gold needs to settle above $2000 to have a chance to gain upside momentum in the near term. The next resistance level for gold is located at $2020. If gold settles above this level, it will move towards the resistance at $2050. A successful test of the resistance at $2050 will open the way to the test of the resistance at $2075.

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