Gold Price Forecast: XAU/USD volatile, between stronger Dollar and lower Treasury yields
25.04.2023, 13:44

Gold Price Forecast: XAU/USD volatile, between stronger Dollar and lower Treasury yields

  • Gold rebounds despite a stronger US Dollar.
  • Falling US Treasury yields are helping the yellow metal.
  • XAU/USD remains under the 20-day SMA, keeps avoiding daily close under $1.980.

Gold price rebounded sharply during the last hour, rising more than $10. XAU/USD bottomed at $1,975 and then jumped to $1,994. As of writing, it trades at $1,987 marginally lower for the day, on a volatile session. Despite the big swings, price remains in a recent familiar range.

Gold price rebound is losing momentum as the US Dollar prints fresh daily highs across the board. The DXY is up by 0.35%, trading at 101.70. At the same time, US Treasury yields are falling again. The US 10-year yields stands at 3.43% and the 2-year at 4.03%, both at two-week lows.

The combination of a stronger US Dollar and lower Treasury yields is favoring large swings in XAU/USD. Incoming economic data from the US, particularly Q1 GDP and consumer inflation on Thursday, could add fuel to volatility.

On a wider perspective, gold is showing some signs of weakness as it remains below the 20-day Simple Moving Average (SMA) which stands near $2,000. At the same time, it has avoided a daily close under $1,980. A close under the mentioned level would point to an extension of the bearish correction.

XAU/USD Daily chart

 

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