- 10-year US T-bond yield rises 3% on Tuesday.
- US Dollar Index recovers after testing 97 earlier today.
- Fed’s Powell makes a dovish shift in his speech in Chicago.
After climbing to its highest level in more than four months near $1329 boosted by the intense flight-to-safety, the XAU/USD pair changed its direction and started to retrace the impressive upsurge that allowed the troy ounce of the precious metal to gain more than $50 since last Thursday. As of writing, the pair was down 0.28% on the day at $1321.
The 10-year US Treasury bond yield, which slumped to its lowest level since September 2017, staged a decisive recovery today and rose 3% as hopes of the Fed going for a rate cut after Chairman Powell acknowledged risks surrounding the Trump administration’s trade policy in his speech today helped the market sentiment improve.
With the risk appetite returning to markets, gold struggled to find demand as a safe-haven and major equity indexes in the U.S. gained traction with the Dow Jones Industrial Average and the Nasdaq Composite adding 1.65% and 2%, respectively, at the time of press.
On the other hand, after testing the 97 handle earlier in the day, the US Dollar Index erased its losses and was last up 0.06% on the day at 97.27. Nevertheless, expectations of a Fed rate cut could make it difficult for the DXY to stretch higher and allow the pair to limit its losses.
Technical levels to consider
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