Gold Surges to Three-Month Highs on Weakening US Dollar

The price of Gold has reached three-month highs near $4,600 as the US Dollar weakens. This is despite the fact that lower Treasury yields normally weaken the currency through the interest-rate channel.

Rabobank analysts observe that this episode appears different from normal. They note that 'this time, gold and crypto also rallied, suggesting concern about fiscal credibility and the perceived management of borrowing costs.'

The technical analysis shows a bullish near-term bias for Gold as it trades at $4,582. The Relative Strength Index (RSI) is reaching overbought levels in most timeframes, but the Moving Average Convergence Divergence (MACD) remains positive.

Bulls are focused on breaking through the horizontal cap near $4,590 and the next targets are the $4700 psychological level and May's top at $4.4773. However, a bearish reaction below the 200-day Simple Moving Average (SMA) at $4,514 would expose previous tops.