The prices of “gold” are falling globally. Will it drop to $ 1,750? By Investing.com

Written by Parani Krishnan

Investing.com – After days of relative consolidation, the price of gold is “starting the cycle again” for those on the wrong side.

Yields hit their pre-crisis levels and tested new levels on Tuesday, which reversed.

And settled down to $ 24.20 an ounce, or $ 1,799 an ounce, below the support level at $ 1,800 an ounce. Earlier in the session, gold futures fell to $ 1,788.40 an ounce, a two-year low, and long traders mentioned what happened in early February, when ‘they fell to 10 week lows, which gold hit due to the big rally. in yields.

Yields on US Treasuries hit a session high of 1.3%, the highest in a year. The American enemy, gold, settled at 90.5.

“With the renewed rise in bond yields, gold has taken a final blow,” says Ed Moya of OANDA. “It doesn’t matter whether the bonds are Eurobond, Gilts or Treasuries. The story is no different.”

“With Treasury yields rising, the economy betting on recovery, many are exiting precious metals positions. Gold is a hedge against inflation, but with post-Corona trading it will go down, until the European Central Bank shows its discomfort with the high bond yields. “

Gold cannot recover as it hit a 10-week drop below $ 1,785 an ounce in the week through February 5. It only rose 0.6%. Gold is one of the limited assets that has not rallied to the stimulus packages. While prices and prices have increased.

Treasury yields rose as fixed-income traders bet the Federal Reserve would hike some of the stimuli it approved for Covid-19, should an economic recovery occur.

The Federal Reserve has denied any possibility of rapid easing.

But the decline in cases in recent days gives investors a glimpse of what could happen.

On February 13, injuries reached 94,000, up from 246,000 in January.

The 7-day average of cases requiring medical attention fell from a high of 132,474 on January 6 to 69,283 on February 13.

Moya added that gold is trying as much as possible to stay away from the Death Cross, which is a technical pattern that can increase the selling momentum on today’s chart as the moving average 50-day falls below the 200-day moving average.

“But any new landing may be imminent.” “The dollar’s rally may not be over, especially in light of good bond yields, and its rise will push gold below the $ 1,750 per ounce level.”