Gold Price Forecast: High Yields Raise the Risk of a Deeper Correction

Gold (XAU) rebounds after the PCE data, but high Treasury yields and a strong US dollar continue to limit the recovery. The spending and growth give the Fed less reason to lower rates and mixed labor data put the next jobs report in focus. The ratio analysis for gold suggests that the gold price remains in a bull market in the long term despite the weakness in the short term. In my view, the correction in Treasury yields and US dollar would support the recovery in gold. This article presents the key economic drivers, signals from the ratio and key levels to understand the next move in gold.