The yellow metal is down just a touch today but in the big picture, it is holding up relatively well despite a breakout in Treasury yields since last week. Of note, gold is still keeping above the pivotal $1,900 mark as price action continues to consolidate for the time being:
Gold (XAU/USD) daily chart
There’s a triangle pattern forming as well that is perhaps worth watching but just outside of that, it looks more that price is hovering in between the $1,900 mark and the 100-day moving average (red line) – seen at $1,939.97 currently.
And just beyond both those levels, there is stronger support from the August lows near $1,885 and the June and July highs around $1983-87. So, those are also key technical layers to be mindful about.
But the thing I’m impressed the most about gold is its resilience despite the jump higher in bond yields. And as major central banks move to the sidelines, there is already a change up in the mood which is siding with gold bugs now.
And once rate cuts start to coming into the picture more prominently, falling yields from the current highs will just be an added tailwind for gold to soar when the time comes.
For now, it’s all about preaching patience I would say. But the time for gold to shine is definitely drawing closer. Now, all it takes is just for economic conditions to worsen to a point where central banks will start to consider cutting interest rates again. And that might not be too far off for the likes of the ECB and BOE at least. But the big fish is still the Fed of course.