International gold prices struggled to maintain their rebound on Monday as weak US jobs data reinforced expectations of further fiscal stimulus, but higher US bond yields stifled the rally.
Spot gold rose 0.11% to US $1816.17 / oz in Beijing 15Rom 51, while the dollar index rose 0.01 per cent to 91.006.
The poor performance of the US jobs report released on Friday (February 5) raised concerns about the slow pace of US economic recovery, with the US index falling from a more than two-month high of 91.60 on the day, and gold prices closed up more than 1.1 per cent.
Howie Lee, an analyst at OCBC Bank, said: "Gold responded to the market's shock to Friday's very dismal non-farm payrolls data, which has increased economic uncertainty and raised high expectations for more fiscal stimulus in the US."
But the yield on the benchmark 10-year Treasury note rose to 1.189 per cent on Monday, the highest since March last year, limiting the rise in gold prices. Rising yields increase the opportunity cost of holding gold, a non-interest-bearing asset.
'The yield is probably the biggest single disadvantage for gold, 'said Nicholas Frappell, global general manager of ABC Bullion. Gold is still vulnerable to the movements of the dollar, he added. There is room for the dollar to continue its recent rally.
Investor attention is still focused on the progress of President Biden's $1.9 trillion novel coronavirus aid plan, and House Speaker Pelosi expects the final legislation to be passed by Congress by March 15.
Us Treasury Secretary Yellen Yellen said on Sunday that Americans earning $60, 000 a year should receive stimulus checks as part of the White House's proposed $1.9 trillion epidemic relief plan. The White House had previously said it was open to discussion as to who should be eligible for the proposed $1400 check.
The break-even inflation rate of 10-year inflation-protected bonds, a measure of average annual inflation expectations over the next 10 years, has risen to 2.19 per cent, the highest since mid-2018. Investors in US Treasuries expect inflation to rise as the US economy recovers from the shutdown of businesses related to the crippling novel coronavirus epidemic.
With the Fed happy to see inflation rise at a time when price pressures remain moderate, analysts say there may be room for inflation expectations to rise further. OCBC's Lee added that with Treasury yields at relatively high levels at this stage and the focus shifted to inflation expectations, gold could rise to $1900 later in 2021.
Spot gold is expected to be blocked at US $1819
According to the hour chart, spot gold rebounded ((4)) from US $1785, and is currently stuck around US $1819, which is the 61.8% target of ((3)) waves. Gold prices fell again. ((3)) waves and ((4)) waves are both sub-waves of the downlink iii wave, which started at 1872 US dollars. The iii wave is part of the downside (c) wave that started at $1876.
On the daily chart, the, (c) wave is the sub-wave of the downside ((z)) wave, which starts at $1959, with a 61.8 per cent target of $1778. The ((z)) wave is part of the adjustment wave 2, which started at $2075. The second wave shows a triple triple serrated structure, which can be subdivided into ((w)) ((x)) ((y)) ((x)) ((z)) five waves.
