- US Dollar Index climbs to two-week highs near 97.80.
- 10-year T-bond yield rises more than 1% on Thursday.
- Upbeat sentiment boosts stocks as well.
The precious metal lost value in USD terms on Thursday with the prevalent risk-on atmosphere making it difficult for the precious metal to find demand as a safe-haven. As of writing, the XAU/USD pair was down 0.8% on the day at $1286.
The lack of fresh headlines surrounding the U.S.-China trade conflict and some upbeat earnings figures from large U.S. corporations, such as retail giant Walmart, provided a boost to the market sentiment today. Major equity indexes in the U.S. started the day in the positive territory with the CBOE Volatility Index, Wall Street’s fear gauge, dropping to its lowest level since early May to confirm the stronger risk-appetite.
Furthermore, after slumping to its lowest level since late March, the 10-year US T-bond yield gained traction and was last seen adding more than 1% on the day. Supported by the upsurge in bond yields, the US Dollar Index staged a decisive rebound and touched its highest level in two weeks above 97.80, allowing the bearish pressure to remain intact.
There won’t be any macroeconomic data releases in the remainder of the day and the risk perception is likely to continue to impact gold’s market valuation.
Technical levels to watch for
The pair could face the first technical support at $1284 (20-DMA) ahead of $1277 (May 6 low) and $1268 (200-DMA). On the upside, resistances are located at $1290 (50-DMA), $1300 (psychological level/100-DMA) and $1309 (Apr. 11 high).