Daily Market Recap - GOLD staging a comeback?

The slight decline in bond yields is giving the yellow metal a breather after deepening its losses last week. The release of inflation figures eased investors' fears that interest rates would rise too quickly.

In the United States, the release of inflation figures in line with expectations reassured the markets at a time when the prospects for economic recovery are raising fears that price increases could accelerate too quickly, as reflected in the sharp rise in bond yields in recent weeks.

Inflation accelerated slightly in February, with prices rising by 0.4% over one month, as expected. On a yearly basis, inflation accelerated to 1.7%, it's the fastest pace since the crisis began.

This statistic caused long rates to ease, with the yield on 10-year U.S. Treasuries returning to around 1.52%, after rising to 1.62% on Friday.

It is clear that the gold price is still under pressure. Prices are still locked in a bearish channel since August 2020 and sellers are keeping a tight grip. Nevertheless, the yellow metal is trying to regain some height, Tuesday's session is characterized by a reversal candlestick.

As such, this structure suggests a short-term low has been achieved. Moreover, the market has settled above the resistance at $1,703, a key pivot level for the future. A technical rebound towards $1,750 is now possible. Of course, the long-term objective would be to regain the $1,800 level, but such a move seems difficult in the current context dominated by rising real rates. In the medium term, the bullish signal will only be given if the price of gold crosses the upper limit of its channel.

(Chart Source: Tradingview 10.03.2021)

In conclusion, a break below $1,700 in the next few days would not bode well for gold bulls, as sellers could push the price even further to reach the ultimate support at $1,670, the lower bound of the channel.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.