Gold prices rallied close to the $1,770/oz mark during the week, but have since consolidated this recovery to remain in a broader trading range of between $1,750 and $1,770/oz.
The safe haven was boosted on the back of Dollar woes amid optimism in markets that Sino-American relations are improving, a likely U.S debt ceiling extension, and upbeat US ADP jobs data – sealing in the Fed’s tapering expectations for November this year.
As a result, U.S Treasury yields once again spiked, with the U.S 10-year bond yield breaching the 1.5% level again. Because gold is a non-yielding money, and U.S Treasury bonds are deemed as the de facto risk-free risk asset globally, this is the most important factor influencing gold price direction.
The jump has tempered the gold price below $1,770, whilst gold bulls and strong central bank buying is keeping the price above the important support level of $1,750.
But if anyone thought central banks’ talk of ‘tapering’ would slow down the printing presses, think again… the European Central Bank completed a study on a new bond-buying program to ‘prevent any market turmoil’ when ‘emergency Covid purchases’ get phased out.
The yellow metal was last seen trading at $1,767/oz.