The precious yellow metal continues its upward momentum as the goldrush pushes prices near a one-week peak on Tuesday after adding a +1.5% rally in the previous session, as U.S. Treasury yields retreated, lifting the appeal of the bullion.
Investors’ concerns are growing to the rapid rising in Treasury yields in recent weeks as they could especially hurt high-growth companies reliant on easy borrowing while diminishing the relative appeal of stocks.
Since the start of February 10-year yields is up about 27 basis points, on pace for their largest monthly gain in three years, with Monday’s close, up at 1.37%. The 30-year yield touched a one-year high of 2.2% Monday. A basis point is 0.01%.
The US Dollar Index, which measures the greenback strength against a basket of major currencies, slid further on Monday and hit an intraday low at 89.83.
Looking forward, all eyes will be on U.S. Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday.
Reviewing the technical aspect, with the bulls overthrowing the bearish challenge, plus closing prices above the $1,798-99 level now gives scope to $1,828-31, possibly, higher to $1,845-55.
This assessment holds while the bulls keep the price above the $1,801-03 level.
The Relative Strength Index (RSI) 3-daily ‘lookback’ indicator has rebounded and cut the 50-midway point (positive), while $1,801-03, while the Moving Average Convergence Divergence (MACD) is potentially in a position to cut the 0.00 axis, which in terms would marry up to the positive signal of the RSI.
Conversely, witnessing a move beneath the support at $1,801-03, however, would negate the bullish call and shift the attention back to $1,760-65.