Please note ThinkMarkets does not provide CFD services to residents of the US.

Please note ThinkMarkets does not provide CFD services to residents of the US.

Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
Proprietary Trading

Partner with us to build your own prop trading business. Enquire with our account managers today.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more
Refer a friend

Receive $50 for you and your friend when you convert them into an active trader of ThinkMarkets.

Learn more
Partnership

Plug into the next-gen platforms and the trades your clients want.

Partner Portal
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

Gold rebounds amid soft dollar as yields ease off highs

Fawad Razaqzada Fawad Razaqzada 22/02/2021
Gold rebounds amid soft dollar as yields ease off highs Gold rebounds amid soft dollar as yields ease off highs
Gold rebounds amid soft dollar as yields ease off highs Fawad Razaqzada
Gold and silver have extended their advance from Friday when both metals closed the session positively to end their recent poor run. The turnaround comes as the dollar continues to be sold, with the Dollar Index now down for the third consecutive day. Commodity dollars continue to outperform amid ongoing reflationary trade, although we have also seen the likes of the yen and euro push higher today. Yields have also eased back down today, with German 10-year bunds turning negative after rising earlier to their best levels since early June. In the US, yields on 10-year Treasury notes dipped to 1.336% after rising as much as 1.394% earlier – a level last seen on 25 February last year.

It is obvious central banks are starting to get worried about the pickup in yields with investors expecting the ongoing government and central bank support to turbo-charge the economic recovery when national lockdowns end. ECB President Christine Lagarde, for example, today said the central bank is closely monitoring longer-term nominal bond yields. The Reserve Bank of New Zealand will likely stress the need for ongoing monetary support when it is widely expected to leave rates at 0.25% on Wednesday. Even the US Federal Reserve has reminded us that QE will not be ending any time soon. Although the economic recovery has been better than expected in some regions of the world, these central banks will be mindful of the many risks ahead as the coronavirus pandemic continues to rage globally. So, the major central banks will probably not want get ahead of the curve and risk pushing up the value of their respective currencies by signalling a tightening cycle prematurely.  Indeed, if anything, with many foreign currencies already having risen so rapidly, they will be keen to verbally talk down their currencies.
 
Against this backdrop, I can’t see yields go significantly higher from current levels. This should allow gold and silver to remain supported, or for the downside to be limited.
 
Still, despite today’s rebound and the recent troubles, gold remains stuck inside a long-term consolidation pattern, with the key support range coming in between $1765 to $1800 as can be seen from this weekly chart:

gold weeklySource: ThinkMarkets and TradingView.com

Prices need to climb above the resistance trend of the above falling wedge pattern to tilt the bias back in the favour of the bulls.

On the daily time frame, we can see that gold was testing a key area of potential resistance at the time of writing, between 1810ish and 1816ish:

goldSource: ThinkMarkets and TradingView.com

If the sellers are still in charge, this is about the area where we could see renewed weakness from.

The key line in the sand is at $1855 – the most recent high. If and when this level breaks, then that is when we will have formed our first key reversal sign: a higher high. Until such a condition is met, the bulls should proceed with extra care as this could turn out to be another short-lived rally.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Related articles:

RDDT soars: here are the levels to watch in c...

By Alejandro Zambrano

26/03/2024

Weekly Market Outlook - 25 MAR to 29 MAR 2024

By

25/03/2024

Weekly Index Dividends

By ThinkMarkets

25/03/2024

Reddit Launches IPO: Can the Struggling Compa...

By Alejandro Zambrano

21/03/2024

Weekly Market Outlook - 18 MAR to 22 MAR 2024

By ThinkMarkets

18/03/2024

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top