Gold prices found their footing following the sharp drop in Treasury yields, coupled with a weakening US Dollar, prompting a reassessment of market dynamics. Amid signals from prominent investors like Bill Ackman and Bill Gross, expressing revised views on US government debt, Treasury yields took a downward trajectory, buoying gold’s recovery.
Despite the dollar’s depreciation and improved market sentiment, the gold price struggled to fully capitalize on the favorable conditions. The 10-year note, which briefly exceeded 5.02% during the US session, retreated to 4.83%, maintaining a subdued stance for the time being.
In the aftermath of the dollar’s slump, the DXY (USD) index hit a four-week low, demonstrating weakness across the board over the last 24 hours. However, this shift failed to provide the necessary impetus for gold to make significant gains.
The cryptocurrency market saw an upward surge, with Bitcoin surpassing $35,000 for the first time since May 2022. Speculation regarding the potential approval of a spot Bitcoin ETF for US investors potentially triggered a short squeeze in the product, fueling the recent surge.
As the global economic landscape remains uncertain, various market indicators reflect mixed sentiments. Crude oil prices slumped, APAC equities experienced fluctuations, and the S&P 500 index remained below the 200-day simple moving average (SMA).
Looking ahead, attention is directed toward a series of PMI numbers across Europe and the US following the release of the UK jobs data. Furthermore, the upcoming 3Q Australian CPI release is anticipated to be critical in shaping the RBA’s monetary policy decisions in the near future.
Despite recent fluctuations, gold’s technical analysis snapshot underscores a resilient support level near 1960, while a clustering of key Simple Moving Averages within the range of 1890 to 1937 signals a potential consolidation phase in the near term. Investors remain watchful for any developments that might sway the future trajectory of XAU/USD.