Investing.com — Gold has recently shown remarkable resilience against the pressures of rising bond yields and a strengthening U.S. dollar. Despite these headwinds, the metal has managed to post gains for two straight weeks.
However, the upward trend in stock markets, which has historically been positively correlated with gold, has faltered in recent weeks, raising questions about the future support of demand for the precious metal.
In light of a robust dollar and rising bond yields, gold has surprisingly risen. The Dollar Index has continued to rise for seven straight weeks and is now testing the 110.00 level, while US bond yields have also risen sharply. The rise in interest rates is not just an American phenomenon; European and UK government bonds are experiencing similar trends.
According to StoneX analyst Fawad Razaqzada, the recent bounce in gold prices appears to be driven by inflation concerns.
“Normally, a strong dollar and rising rates would put pressure on gold prices, but investors appear to be hedging against inflation risks. However, this demand may not be enough to push prices to new records in the absence of broader supporting factors,” wrote he. .
From a technical perspective, gold is at a critical juncture, testing key resistance levels around $2690. Razaqzada added.
Should selling pressure increase again, support is around $2650, with further potential declines to $2600, $2530 and $2500. Conversely, a break above the $2710-$2725 resistance zone could indicate the possibility of new all-time highs, although this is not the expected outcome.
This article was produced with the support of AI and reviewed by an editor. For more information see our General Terms and Conditions.
