Rising US yields have exacerbated gold’s decline, with downward pressure having gold testing key Fibonacci markers at 1,726 and 1,689. The 19.2% decline from August 2020’s 2075 peak places the yellow metal at oversold levels, with XAU/USD driven towards a test of a 1,660-1,670 support confluence zone, Benjamin Wong, Strategist at DBS Bank, reports.
See – Gold Price Analysis: Weaker USD and range-bound real yields to underpin XAU/USD – Standard Chartered
Key quotes
“Gold ETF demand sprouted from September 2019 onwards, and back-testing that against an average line costing, such holdings are average costed around 1680 (hence the significance of the 1,660-1,670 confluence zone).”
“Both gold longs either on ETFs or futures positioning are reducing longs – hence, unless gold secures a sustained return over 1,760-1,765 (the May highs and a prior 50% Fibonacci marker) and the 200-day moving average at 1,859, the risks would be both ways until the bull reasserts its presence.”
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