FxWirePro: Gold vs Bond yield

Gold was one the best performer in this quarter and jumped more than $200 on account of trade war tension and declining bond yield. The bond yield price is inversely proportional to the yellow metal.

Global Bond Yield  

The bond yield of major economies has shown a major sell-off especially US 10 year declined more than 30% and is currently trading around 1.55%. US 30 year yield is trading around 2% and spread between 10 and 30 year narrowed to 45 basis points from 52 basis points.

The US 2 year is trading around 1.526% and spread between 2 year and 10 year have declined sharply from 13 basis point to 3 basis point. The yield curve got inverted (US 3 month trades higher than US 10 month) which increases the chance of recession.

The UK 10 year and 2-year yield spread inverted for the first time in a decade and German bund at an all-time low.

Technical analysis:

The yellow metal is consolidating after breaking the $1500 level. It hits a high of $1534 and is currently trading around $1518.

On the flip side, the near term major support is around $1480 and any violation below will drag the yellow metal till $1445/$1414 in the short term.

The near term resistance is around $1535 and any convincing break above targets $1560/$1590 level.

The momentum indicators RSI is above 70 levels in the monthly chart and use minor dips as buying opportunity.

It is good to buy on dips around $1430-35 with SL around $1400 for the TP of $1535/$1560.