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On January 29th, the US Treasury yield curve steepened for the second consecutive trading day, primarily driven by a weaker dollar and stronger oil prices, both of which boosted inflation expectations. The 2-year/10-year Treasury yield spread widened to 67.6 basis points at one point, up from 66.6 basis points at the close on Tuesday. The yield curve exhibited a typical "bear market steepening" characteristic, where longer-term yields rise faster than shorter-term yields as investors price in the risk of renewed inflation acceleration. Gunnett Dingela, Head of US Interest Rates Strategy at BNP Paribas, stated, "Weaker dollars typically lead to longer-term yields becoming more sensitive to inflation risks. Therefore, the dollar and Treasuries often act as pressure relief valves for the combination of monetary and fiscal policies. If the combination of fiscal and monetary policies suggests that the dollar will continue to weaken, then I think the rise in long-term yields is a textbook reaction."The German DAX 30 index closed down 91.30 points, or 0.37%, at 24,816.93 on Wednesday, January 28; the UK FTSE 100 index closed down 55.50 points, or 0.54%, at 10,152.30 on Wednesday, January 28; and the French CAC 40 index closed down 86.14 points, or 1.06%, at 8,066.68 on Wednesday, January 28; European The Stoxx 50 index closed down 62.53 points, or 1.04%, at 5932.06 on Wednesday, January 28; the Spanish IBEX 35 index closed down 206.52 points, or 1.16%, at 17597.58 on Wednesday, January 28; and the Italian FTSE MIB index closed down 343.94 points, or 0.76%, at 45096.50 on Wednesday, January 28.The percentage of winning bids for the 4-month U.S. Treasury bonds auctioned as of January 28 was 45.62%, compared to 50.47% previously.The bid-to-cover ratio for the US 4-month Treasury bond auction ending January 28 was 2.92, compared to 2.99 previously.The US 4-month Treasury auction on January 28th yielded a winning bid of 3.59%, compared to 3.58% previously.

Predictions for Gold Prices — Gold prices rose as the dollar weakened

Alina Haynes

May 24, 2022 09:43

Gold prices rise as the dollar weakens to start the week. The currency experienced negative pressure on reduced growth prospects and likely march toward recession. Benchmark rates climbed as shares surged today. Today, the yield on the ten-year Treasury note rose by 3 basis points.

 

On Monday, there was little going on in the world of business. Focus continues on Fed Chair Powell’s speech tomorrow and major economic statistics including PCI and first-quarter GDP published this week. Investors are anxious about impending recession and sluggish economic growth.

Analytical Methods

Gold prices came back from session highs but are still higher and possibly be headed to the 1860s. This week's economic statistics might point to a slowdown in economic growth, which would benefit gold.

 

To begin the week, gold prices held above the 200-day moving average of $1839. Support is indicated near the 200-day moving average near 1839. Resistance is apparent at the May 12th peak of 1858.

 

The Fast Stochastic has formed a crossover buy signal, indicating that the short-term momentum is bullish. Prices are no longer oversold as the fast stochastic prints a value of 54.58, considerably above the oversold trigger level of 20.

 

Medium-term momentum turns bullish as the MACD can provide a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average passes below the 9-day moving average of the MACD line.

 

Price declines are predicted by the MACD (moving average convergence divergence) histogram, which shows a downward trend in price.

 

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