Gold prices came under bearish pressure just before the NY session, but bulls have been able to snatch back most of the earlier losses.
The bearish pressure arose due to the rise in US long-term bond yields on the day, following a string of losses last week. This has forced gold prices to stall at the price wall located between $1828 and $1840.
Economists at Danske Bank are projecting that US bond yields will rise over the next 3-6 months, keeping pace with US recovery. Rising inflation expectations mean that the timing of any tapering by the Fed QE will remain a topical issue, even though Friday’s weak jobs report and the Fed’s stance on keeping interest rates low for an extended period suggests otherwise.
Gold price is down 0.07% on the day.
Technical Levels to Watch
Attempts by gold price to break past the price wall at 1828/1840 remains unsuccessful. The active daily candle has formed a pinbar which could have bearish implications on price. A correction at this point could be imminent and will target the 1815.20 support level. Below this point, 1800.00 (psychological support) and 1789.49 are additional downside targets.
On the other hand, a breakout above the price wall opens the door towards the 1860.77 price level, with additional upside targets at 1881.68 and 1900.95 (psychological resistance and 28 December 2020 high). This price move may also result from dip-buying following a correction and bullish gold price action resurgence.