Gold gains in Asia as treasury yields slide

Dovish Brainard and the resulting weakness in the long duration and short duration treasury yields helped gold prices extended Monday’s rebound to $1332/Oz levels.

Trades above hourly 200-MA

The metal is trading above the hourly 200-MA level of $1329.50. Prices recovered from the low of $1320.20 ahead of Brainard speech and extended the recovery to $1330/Oz levels after Brainard maintained her dovish stance, thereby disappointing interest rate hawks.

A minor wobble in early Asia was quickly undone as the 10-yr treasury yield fell two basis points. The 2-yr yield, which mimics short-term rate hike bets fell two basis points as well.

However, the metal is having a tough time extending gains over and above the hourly 200-MA level.

Gold Technical Levels

Acceptance above $1333 (5-DMA) would open doors for $1336 (50-DMA). Further gains could run into resistance at $1353 (Sep 7 high). On the other hand, a breakdown of support at $1327 would expose $1320 (previous day’s low) and $1311 (July 21 low).