Gold drops as US dollar strengthens, treasury yields rise

The uptick in the treasury yields this Monday morning and the resulting strength in the US dollar saw Gold drop 0.30% to $1230.15. 

Rejected at weekly 200-MA

The bullish momentum in the yellow metal ran out of steam at $1244 (weekly 200-MA) last week after President Trump talked about tax cuts. The geopolitical risk premium dropped as well after Trump changed tack and agreed to honor ‘One China’ policy. 

The resulting risk-on in the markets helped the 10-yr treasury yield recover from 2.32% to 2.43%. This helped the US dollar regain poise. The yield was last seen trading close to two basis points higher on the day around 2.43%, while the Dollar Index was up 0.20% at 100.92 levels. 

Gold Technical Levels

A break below $1225 (10-DMA) would expose $1221.30 (Friday’s low) and $1217.60 (100-DMA). On the other hand, breach of 5-DMA at 1233.40 could see prices break above $1237.16 (previous day’s high) and test supply around the recent high of $1244.71.