Gold Tries To Gain More Ground As Treasury Yields Keep Moving Lower

Key Insights

• Treasury yields continue to move lower, which is bullish for precious metals. 
• Gold markets will also remain sensitive to geopolitical news. 
• Gold mining stocks will gain additional upside momentum if gold settles above the current trading range. 

Gold Stays Close To The $1935 level

Gold continues its attempts to settle above the resistance at the 20 EMA at $1935 as Treasury yields are moving lower. The yield of 2-year Treasuries is currently trying to settle below the 2.30% level, while the yield of 10-year Treasuries has recently managed to get below 2.32%.

It should be noted that the yield of 2-year Treasuries is very close to that of 10-year Treasuries, so the inverted yield curve may soon become a reality. Typically, the inverted yield curve signals that recession is around the corner. In case the yield of 2-year Treasuries exceeds the yield of 10-year Treasuries, safe-haven assets like gold may get more support.

Yesterday, traders continued to buy gold mining stocks, and VanEck Gold Miners ETF settled above $38.60. At this point, VanEck Gold Miners ETF needs to get above the key resistance level at $39 to gain additional upside momentum. Most likely, this move would be possible only if gold manages to settle above $1935 and moves closer to the $1950 level.

Technical Analysis

Gold continues to get strong support near the $1915 level and is trying to settle above the high end of the current trading range at the 20 EMA at $1935. In case gold manages to settle above this level, it will move towards the next resistance at $1950.

A successful test of the resistance at $1950 will open the way to the test of the resistance at $1965. If gold settles above $1965, it will move towards the resistance at $1975.

On the support side, the nearest support level for gold is located at $1915. A successful test of this level will push gold towards the 50 EMA at $1905. If gold declines below the 50 EMA, it will head towards the support level at $1880.

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