Gold gains despite rising yields

Interestingly, gold investors continued to ignore rising yields – and the dollar. The yellow precious metal broke to a fresh weekly high above $1825, even as the 10-year yield closed in on the 2.000% level. It looks like investors happy to pile into gold, a non-interest-bearing asset, as they seek to protect their wealth against the impact of soaring inflation. Rising prices are eroding the value of fiat currencies around the world, making gold an appealing investment for many.

Bond yields rise across the board

Indeed, it is all about bond yields this week. They are rising left, right and centre. At the time of writing, the Us 10y yield was trading at 1.9668%, thus further closing in on the 2.000% levels. The German 10-year yields, which a few days ago were below zero, climbed to above the 2019 high of 0.273%. In the UK, the equivalent maturing bonds climbed above 1.50% for the first time since October 2018.

Yields have been on the ascendancy because of rising expectations over monetary policy tightening from major central banks. Read more HERE.

Gold testing key resistance

Gold still needs to break decisively above the $1830 resistance level in order to attract technical momentum-chasing speculators. For now, price action continues to remain inside the existing ranges. But the metal’s performance – despite rising yields and the dollar – is commanding, and points to a possible breakout.

Source: ThinkMarkets and TradingView.com