Gold prices on the XAU/USD chart came under severe pressure this Thursday, as bond yields resumed the upside trajectory following yesterday’s pullback.
The bounce in the US bond yields allowed the greenback to see some demand, with real bond yields on the 10-year US bond presently up by 0.8% as of the time of writing.
The dovish Fed minutes reduced inflation expectations as well, cutting demand for inflation hedge assets such as gold. Furthermore, the rise in bond yields makes US Treasuries a preferred option to the non-yielding gold, further dropping the yellow metal’s demand.
However, poor US data kept the greenback on the back foot, which is why gold price retains some support at $1763.
Technical Outlook for Gold Price
Gold price on the XAU/USD daily chart broken below the triangle’s lower boundary, setting the stage for a potential measured move that could see gold prices slide to 1559.07(50% Fibonacci retracement). However, several hurdles exist along this pathway, starting with the 1763.30 support mark (30 Nov 2020 low). The price must break down this support to open the pathway, with 1741.01 and 1699.43 lining up as additional barriers to the south.
On the flip side, a bounce on 1763.03 could allow for a pullback to the upside, which could retest the 1789.49 resistance, followed by the triangle’s lower border (now acting as resistance in role reversal at 1815.20).
XAU/USD Daily Chart