Us Treasuries have been hit hard in recent days in anticipation of a better global economic outlook and the looming risk of higher inflation. Federal Reserve Chairman Colin Powell assured investors this week that the Fed was in no hurry to withdraw its stimulus measures, encouraging investors to push the yield curve higher.
Edward Moya, a senior market analyst at Oanda, said the faster global Treasury yields rise, the more gold falls. After such a surge in Treasury yields, it is highly likely that the rate of rise will not be maintained, so the gold market may begin to stabilize, but if government bonds continue to be sold off and gold futures prices fall below the important support level of $1750, then technically, gold prices could fall by more than 5 per cent.
Today, spot gold fell slightly in Asia on Friday, trading around 1769. Soaring bond yields and better-than-expected economic data have undermined demand for gold, forcing investors to re-examine the relative value of other assets against a backdrop of sharply higher US bond yields.
In addition, good initial unemployment data further dragged down the price of gold, gold ETF positions 12 consecutive falls also seem to herald the bumpy fate of gold in the future.
As an important factor supporting the record surge in gold prices in 2020, gold ETF positions have fallen for 12 consecutive years, indicating that gold prices are likely to continue to decline.
However, Biden's $1.9 trillion stimulus, the dovish stance of the Federal Reserve and a weaker dollar have limited gold's decline. Against a backdrop of falling unemployment, extraordinarily loose monetary conditions and the possibility of further strengthening consumer demand, the $1.9 trillion stimulus package is three times the expected output gap of the US economy.
From a technical point of view, short-term gold prices may continue Thursday's decline, below the key support to focus on the 1760 line. A fall below 1760 key support could accelerate the decline in gold prices.
Now gold is more affected by the US dollar, US debt yield, tonight there is the US GDP and the initial application for unemployment benefits data, it is expected that it will have a greater impact on the US dollar and US debt yields, especially the US dollar has reached the key position 90, if the economic data is not good enough to make the US dollar break 90, then gold may rebound on the pressure line of the previous decline channel, but it is expected to be more difficult to break the pressure line.
