Daily Market Recap - GOLD Falling bond yields push up gold prices

The price of gold is rising on Thursday, as the yield on 10-year U.S. Treasuries is falling again, down 15 basis points from its March 23 peak of 1.776%.

The decline in bond yields is once again dampening the U.S. dollar, which is falling to a four-week low against the major currencies. As a result, lower bond yields and a weaker dollar are helping the yellow metal rise.

In addition, a series of good reports on the health of the U.S. economy has provided some support for gold, given the threat of inflation.

Several economic indicators released to confirm that the gradual lifting of health restrictions and the Biden administration's stimulus package is supporting sustained recovery inactivity: retail sales rebounded by 9.8% in March, jobless claims fell more than expected last week, and the Philly Fed and Empire State business indexes for April were above consensus.

Hopes of a corporate reopening have mostly benefited oil and industrial metals such as copper, but gold has lost ground, even suffering its worst start to a year since 1982.

Nevertheless, it is clear that the ounce of gold has been recovering for several sessions. The asset has stabilized in a consolidation range between $1,677 and $1,750. Thus, the break of the resistance argues for a short-term bullish recovery. Graphically, prices have validated a trend reversal pattern: a double bottom. The next technical target is therefore at $1,790 and then $1,825.

However, the yellow metal is also locked in a bearish channel since August 2020. Currently, the market is working on the upper bound of the channel for around $1,766, but a breach of this boundary would reinforce the upcoming bullish scenario.

(Chart Source: Tradingview 15.04.2021)

Today's session is characterized by a flowing and directional candle, which suggests real enthusiasm from buyers. As a result, we could see a new leg up to reach $1,850 in the coming weeks.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.