Gold: 10-year US Treasury yields are back above 1.50%, pressurizing gold price

Amid thin-year end liquidity conditions, gold price continues to trade choppy within familiar levels, largely pivoting around the $1,800 mark. The downbeat sentiment around gold price could be attributed to a broad-based US dollar rebound, aided by the recent strength in the Treasury yields. 

The Technical Confluences Detector shows that the gold price is struggling to recapture strong resistance at $1,803, which is the intersection of the Fibonacci 38.2% one-week, Fibonacci 61.8% one-day and SMA10 one-day.

The immediate upside will then be capped by the Fibonacci 38.2% one-month of $1,806. The previous day’s high of $1,808 will provide another roadblock to gold buyers.

Acceptance above the latter could fuel a renewed uptick towards the previous week’s high of $1,811, above which the December top of $1,820 will be on the bulls’ radars.

On the flip side, the Fibonacci 38.2% one-day at $1,796 will get tested on a sustained move below $1,800.

A dense cluster of healthy support levels is aligned around $1,793, which will be a powerful cap. That price zone comprises of the SMA100 four-hour, Fibonacci 23.6% one-day and pivot point one-week S1.

SMA100 one-day at $1,791 will be the next downside target, below which sellers will aim for the Fibonacci 23.6% one-month at $1,787.

Fundamental Overview

The 10-year rates have recaptured the 1.50% key level, which warrants caution for gold bulls. Going forward the year-end repositioning in the greenback will continue to have a significant impact on gold while thin conditions could exaggerate the moves.