U.S. markets open in 2 hours 32 minutes
  • S&P Futures

    3,775.25
    -14.25 (-0.38%)
     
  • Dow Futures

    30,673.00
    -108.00 (-0.35%)
     
  • Nasdaq Futures

    11,471.50
    -58.00 (-0.50%)
     
  • Russell 2000 Futures

    1,701.30
    -6.70 (-0.39%)
     
  • Crude Oil

    108.02
    +2.26 (+2.14%)
     
  • Gold

    1,790.30
    -17.00 (-0.94%)
     
  • Silver

    19.64
    -0.71 (-3.50%)
     
  • EUR/USD

    1.0457
    -0.0026 (-0.25%)
     
  • 10-Yr Bond

    2.9720
    0.0000 (0.00%)
     
  • Vix

    28.68
    +0.52 (+1.85%)
     
  • GBP/USD

    1.2060
    -0.0116 (-0.95%)
     
  • USD/JPY

    135.3130
    -0.4150 (-0.31%)
     
  • BTC-USD

    19,124.22
    +93.29 (+0.49%)
     
  • CMC Crypto 200

    411.61
    -19.86 (-4.60%)
     
  • FTSE 100

    7,171.76
    +2.48 (+0.03%)
     
  • Nikkei 225

    25,935.62
    -457.42 (-1.73%)
     

Gold Stays Below $1850 As Traders Remain Focused On Hawkish Central Banks

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Key Insights

  • Demand for gold remains under pressure as traders expect rate hikes from central banks. 

  • Recession fears may provide some support to safe-haven assets. 

  • Gold markets will likely remain extremely sensitive to yield dynamics in the upcoming trading sessions. 

Rising Yields Remain The Key Driver For Gold Markets

Gold continues to trade below the $1850 level as traders wait for signals from the U.S. Treasury markets.

Treasury yields have recently pulled back from multi-year highs but many traders believe that this is a temporary correction. Inflation remains a big problem, so the Fed will have to raise rates aggressively, pushing Treasury yields to higher levels. Other central banks face similar challenges.

High yields are bearish for gold which pays no interest. The rally in Treasury yields has already put significant pressure on gold and pushed it from the $2070 level in March to the recent lows near $1800.

Recession Fears May Provide Some Support To Gold

While higher yields continue to put pressure on gold markets, recession fears may increase demand for safe-haven assets and provide some support to gold bulls in the upcoming trading sessions.

Copper prices, which often serve as a barometer of economic sentiment, have recently declined to lows that were last seen back in August 2021. Demand for copper is sensitive to economic activity. When the economy slips into a recession, demand for copper declines, putting pressure on its price.

The price of copper is already down by roughly 20% from March highs. This move highlights growing concerns about global recession.

Recession fears may increase demand for safe-haven assets and provide more support to gold. However, it remains to be seen whether this support will be sufficient enough to push gold back to the $1900 level. In recent months, funds were flowing into the safe-haven U.S. dollar, creating additional pressure on gold markets.

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

This article was originally posted on FX Empire

More From FXEMPIRE: