Gold Rallies as Stronger Yen Dampens Hawkish Fed Expectations
Gold prices rebounded on Thursday after slipping to a nearly four-week low the previous day. The sharp rally in the Japanese Yen weighed on the US Dollar, helping gold regain ground. At the time of writing, gold (XAU/USD) trades around $4,425, up 0.87% on the day.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades near a one-week low at 99.26. The rapid move in the Yen has raised speculation over another round of currency intervention or a rate check, although Japanese authorities have not confirmed either.
Elevated bond yields and hawkish Federal Reserve expectations pose challenges for gold's recovery. Government bond yields have climbed to multi-year highs across major economies as fiscal and inflation concerns deepen. The benchmark 10-year US Treasury yield trades around 4.78%, its highest level since October 2023.
The technical analysis suggests that immediate resistance is located at the horizontal level of $4,450, followed by the 200-day SMA at $4,533 and the $4,700 mark. On the downside, the psychological level of $4,400 offers initial support ahead of the 100-day SMA at $4,357 and the 50-day SMA at $4,231.