Gold Price Prediction: Sideways Trading Continues, Brace for Breakout!

The precious metal GOLD prices closed at 1732.50 after placing a high of 17554.20 and a low of 1716.60. Gold prices tried to break the bearish momentum on Thursday but failed to do so and continued their bullish streak for the third consecutive session. Prices were mixed on Thursday as they rose in the first half of the day and declined in the second half. The decline in the yellow metal was caused by the strength of the US dollar that was triggered by the recent hike in the US Treasury bond yields.

The 10-year US treasury note yield rose and reached its 13-month highest level above 1.7% on Thursday. The rising Treasury yields have been bad news for gold lately, and the investors were hopeful that Powell would give any hint of the Central Bank buying more bonds to cap the rising yields as they have been limiting the rally in risk assets. However, Fed Chair Jerome Powell declined to comment on the issue and added in the rising trend of yields that ultimately added further pressure on the yellow metal prices. Gold has been used as a hedge against inflation worries for about decades. Still, in recent months, the investors at Wall Street have been deliberately cautious and investing in Treasury yields and the US dollar instead of the precious metal against rising inflation worries.

On the other hand, the US dollar Index that tends to decline in heightened inflation fears was also rising in recent months. The greenback’s status as a reserve currency has encouraged its standing as a safe-haven and investors have started using it as a store of value that has pushed its price to 92 level. The strength of the US dollar kept the pressure intact on the prices of yellow metal on Thursday.