Logo of Phnom Penh Post newspaper Phnom Penh Post - Strong bond yield-driven dollar pins down gold prices

Strong bond yield-driven dollar pins down gold prices

Content image - Phnom Penh Post
Analysis by Golden FX Link Capital business manager Chhea Chhayheng

Strong bond yield-driven dollar pins down gold prices

Gold prices softened as rising US Treasury bond yields strengthened the greenback, making the dollar more attractive to investors.

Prices of the precious yellow metal on Monday declined modestly from $1,800 to $1,760 per ounce.

The White House on Friday announced the lifting of Covid-19 travel restrictions for fully vaccinated foreigners from November 8, which triggered a demand for jet fuel. But gold is certain to move the opposite direction, according to investing.com.

Independent forex portal FXStreet’s editor Guillermo Alcala said on Tuesday: “The increase on US Treasury bonds, fuelled by increasing expectations that Fed tapering is around the corner, has made the US dollar a more attractive refuge for inflation than gold.

“The US 10-year yield has ticked up to 1.57 per cent from 1.55 per cent on Friday, while shorter-term notes, like the five-year yield, surging to 20-month highs at 1.19 per cent as investors start speculating about the possibility of higher interest rates for 2022.”

Investing.com said: “Gold prices are projected to see further weakness after last week’s brief swing that took it above $1,800 – only to collapse within 24 hours. Last week’s minutes of the Fed’s September meeting showed that a November announcement is on the cards and tapering could even start later the same month.”

From a technical perspective, gold prices are being traded in a range of $1,760 to $1,785 – remaining firm above the $1,760 level and indicating that the market is consolidating after the $40 drop last week.

In daily charting, gold prices are moving in a downtrend, so if the price breaks below $1,760, the next drop for gold might be $1,745, an October low point, followed by $1,725, a September low point.

As a result, traders can wait for candlestick analysis confirming the $1,785 resistance zone before placing a sell order, with the take-profit function at $1,765 and the stop-loss at $1,800.

Content image - Phnom Penh Post

MOST VIEWED

  • No payment required for travellers taking rapid Covid tests on arrival

    Ministry of Health officials said there would be no payment required for the rapid Covid-19 tests given to travellers who arrive in Cambodia from November 15 onwards after the quarantine requirement is lifted for fully vaccinated people. Health ministry spokeswoman Or Vandine told The Post on

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Police arrest Canadian with 167kg of drugs

    The Phnom Penh Municipal Court on November 15 placed a Canadian national in pre-trial detention in connection with smuggling and possessing 167kg of illegal drugs. Deputy National Police chief in charge of anti-drug enforcement Mak Chito told The Post on November 15 that the man was arrested