Gold advances to 6-month highs as stocks continue to suffer losses

• Risk-off mood boosts demand for safe-havens.
• US Dollar Index drops below 96.50.
• 10-year T-bond yield falls more than 2%.

The XAU/USD pair continued to edge higher in the NA session and touched its highest level in more than 6 months at $1279. As of writing, the troy ounce of the precious metal was trading at $1278.50, adding $11.5, or 0.9%, on the day.

The combination of a dismal market mood and the broad-based selling pressure surrounding the buck seems to be fueling the pair’s rise on Thursday. After gaining nearly 5% yesterday, major equity indexes in the U.S. started the day under pressure and pushed lower in the session to show that the risk-aversion became the main theme of the markets today. At the moment, the Dow Jones Industrial Average and the S&P 500 are both down more than 2% while the Nasdaq Composite is erasing 3.2%.

Confirming the risk perception, yields of the safe-haven Treasury bonds recorded sharp losses and forced the greenback to retrace yesterday’s rally. As the 10-year bond yield is losing more than 2% on the day and approaching its lowest level since April, the US Dollar Index is down 0.55% on the day at 96.48. Moreover, today’s disappointing consumer confidence report published by The Conference Board made it difficult for the buck to find demand.

• US:  Conference Board’s Consumer Confidence  Index declines to 128.1 in December.

Technical levels