Bond Yields increasing, Stocks decreasing!
It is Good Friday today, and markets in most developed economies are closed, so the short week ended. It was a positive week for Gold with a 1.39% weekly gain, despite the 0.2% decline on Thursday.
While with increasing tensions gold safe-haven demand was increasing the prices, the US dollar rallied, to put pressure on the yellow metal. After CPI numbers published on Tuesday that was showing inflation may hit the peak and can decline, Wednesday's producer price index, which measures the final price of production increased more than expectations to hold the concerns of higher inflation in the following months.
US Bond Yields have been decreasing on Tuesday, after Tuesday's CPI numbers. On Wednesday and Thursday, Yields again started to increase and lifted the SU dollar as well, especially with PPI numbers on Wednesday and Retail sales and labor market data on Thursday. US 10-years bench maker Treasury yields increased to 2.83%. This fast re0increasing in yields lifted the USD and increased the short-term pressure on Gold. Short term, because stock markets were under pressure and it will increase the gold safe-haven demand in the next few days.
On the data front, US initial jobless claims for the week ended April 9 increased again to 185,000 compared with 170,000 expected, after several weeks of decline. In addition, continuing claims for the week ended April 2 decreased to 1.475 million versus 1.500 million estimates, and 1.523 million in the week ago. Also, US retail sales increased, but as we know, it was mostly thanks to increasing the prices and not exactly fair market and increasing the consumer spending power.
From the technical point of view, Gold still moves in a clear uptrend. The short-term decline also as we can see in the below H1 chart not seems too strong with RSI at 51 and reversing the OBV trend line.
In the long term, by drawing the Fibonacci levels at the Daily chart, we can see that the price again started to increase after declining to 61.8% at 1,890 US dollars. Gold creates very strong support at this level, and as long as it is trading above this level, bulls still will have full control of the market. 23.6% of the Gold Fibonacci level sits at 2,000 US dollars, and breathing above this level will open the doors for much higher levels. For now, it technically remains bullish.
