Gold returned to the soft bullish channel after a sharp fluctuation
Gold lost momentum after a sharp increase and hit the $,2000, early Tuesday in the Asian trading hours, as US bond yields and Dollar are at a multi-year high. DXY tested above 101-Marke before easing a little bit to 100.70 as yesterday mentioned, while yields on 10-year US inflation-linked bonds tested above 2.90%.
Monday with increasing tensions in Ukraine and inflation concerns around the globe, gold continued its sharp movement. However, today gold gave up most of Monday’s gains as the dollar index got stronger. And now with a little bit of flexibility in the dollar rate, the yellow metal is trading softer 0.5% lower than last night's high.
Overall geopolitical tensions show that we can still count on the Gold price to rise, but higher yields and a stronger US dollar should slow down the bulls' rally.
Increasing inflation will push the FED to increase the rates in the next meetings, at least by 25bp each time. Therefore, the stock market should continue suffering and hold the gold Safe-haven, and hedge demand to lift the prices, despite the increasing US dollar.
From the technical point of view, as you can see in the below figure, gold in the daily chart returned to its soft bullish range. $1963 and then $1917 are the support lines under the current price, with more focus on $1,917. As long as the price moves above this level, we can still count on the bulls, but breaching under this level in the short term can change the trend.
