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Key Insights

• Gold failed to settle below the support at $1865 despite rising yields.

• The U.S. Dollar Index declined after an unsuccessful attempt to settle above 104, which was bullish for gold.

• A move above $1880 will push gold towards the resistance at $1890.

Gold

Gold received support near $1865 and is heading towards the $1880 level as the U.S. dollar pulls back from yearly highs.

The U.S. Dollar Index has recently made an attempt to settle above the 104 level but faced strong resistance and declined towards 103.60. The American currency is supported by rising Treasury yields.

The yield of 30-year Treasuries continues its attempts to settle above the 3.15% level, while the yield of 10-year Treasuries has managed to get above the 3.05% level.

A combination of strong dollar and rising Treasury yields is bearish for gold that pays no interest. At the same time, gold gets some support from the rising demand for safe-haven assets. This demand may increase further in case S&P 500 settles below the 4100 level and continues its pullback.

VanEck Gold Miners ETF made an attempt to settle above the $36 level during yesterday’s trading session but lost momentum and pulled back below the $35 level amid a broad market sell-off. Today, this pullback could be continued as S&P 500 futures are losing ground in premarket trading.

Technical Analysis

Gold failed to settle below the support at $1865 and is moving towards the resistance level at $1880. If gold settles back above this level, it will head towards the resistance at $1890.

A successful test of the resistance at $1890 will open the way to the test of the next resistance at $1900. In case gold moves above this level, it will head towards the 50 EMA, which is located at $1910.

On the support side, gold needs to settle below the support at $1865 to have a chance to develop downside momentum in the near term. The next support level for gold is located at $1850. If gold declines below the support at $1850, it will head towards the next support level at $1830.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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