Gold reaction ahead of Bond Auction!
While the US dollar still raising, and Wall Street increasing, Gold trying to realize its next trend and get out of created range in the past week. This trading ranged caped between 1,855 and 1,870.
In the past week, gold price was higher following the worries about increasing inflation, supply-chain bottlenecks, increasing the new cases of COVID-19 infected, and finally the reports that show that global economic growth is slower than earlier estimates.
Despite all market risks that can increase the Safe-haven demands, increasing bond yields again added some pressure on prices, drawing some appetite away from precious metals. Today we have 4 and 8 Week Bill Auction in the US, which again causes the Bond yields to increase. The yield on the benchmark 10-year Treasury increased over 1.60% earlier and again a bit down, trading with some volatility ahead of today`s auction.
The pullback in the gold price can be seen these days with increasing stock markets, a rising dollar, and higher yields for government debt. At the same time, falling VIX and lower market risk, can put more pressure on Gold price, especially under $1,855. On the flip side, an increasing price above the higher band of the currently created range at 1,870, can change the game and direction towards $1,900.
