Gold: Fed rate hike bets halts recovery

FXStreet (Mumbai) – The recovery in the Gold prices stalled near USD 1100/Oz levels on Thursday as the Fed rate hike bets were boosted after US GDP report confirmed a turnaround in the second quarter.

Gold drops as 2-year treasury yield strengthens

The metal came under pressure to print a session low of USD 1083/Oz today, tracking the rise in the 2-year yield which mimics the rate hike expectations the US. The yellow metal showed resilience in the US session on the back of a drop in the US equities, but the flattening of the yield curve – an indication of a rise in rate hike bets, eventually weighed over the metal.

With no major data due for release today, the metal is likely to remain at the mercy of the rate hike bets. Gold is likely to track the movement in the short-end treasury yields as we head into the weekend.

Gold Technical Levels

The immediate support is seen at 1071.28 (July 20 low), under which the prices could extend the drop to 1050.00. The resistance is seen at 1087.18 (July 23 low) and 1100.00 levels.

The recovery in the Gold prices stalled near USD 1100/Oz levels on Thursday as the Fed rate hike bets were boosted after US GDP report confirmed a turnaround in the second quarter.

(Market News Provided by FXstreet)