Gold Remains at Highest Position, Moderating as US Bond Yields Rise


Gold fell slightly from a new all-time high of $2,353.78 in Asian trading yesterday (Monday).

Short-term potential in global central banks' holdings of safe-haven assets in gold remains strong and has pushed prices higher recently.

The price of the yellow metal is still at a positive level even though the US Treasury yield increased after the Non-Farm Payrolls (NFP) report was strong in March to help strengthen the expectations of the Fed in cutting interest rates in June.

Meanwhile, the price of gold is currently at $2,340.55, which is up by 0.05% since the opening of Asian trading early this morning.

The 10-year US Treasury yield rose to a four-month high near 4.45%. In general, higher bond yields dampen gold's appeal because it increases the cost of holding it. However, the effect did not last for the past few weeks.

A Fed official sees no need for them to continue cutting interest rates if inflation remains constant.

Minneapolis Fed Bank President Neel Kashkari said interest rate cuts are not needed this year.

He also said that the Fed will need to maintain interest rates at 5.25% - 5.50% if inflation remains stronger than expected. Assuming it (inflation) is still ineffective, a further unexpected rate hike may occur based on some recent indicators.

Technically speaking, XAU/USD continues to climb even though the momentum oscillators are turning overbought and pushing the price higher in the near future.

Gold rose to $2,350 and investors are expected to take new positions after the recent release of US inflation data.

The March 21 high at $2,223 will be the main support area to gold's rise now.

The 14-period Relative Strength Index (RSI) reached 84.00 which indicates that the bullish momentum is still active. However, overbought signals have emerged.