Gold recovered some ground on Thursday, with the gold spot price XAU/USD bouncing from a three-week low of $1,622 an ounce amid a broad-based pullback of the dollar despite the unremittable advance of U.S. Treasury yields.
At the time of writing, the XAU/USD pair is trading at the $1,635 area, 0.3% above its opening price, having hit a daily peak of $1,645 earlier that day.
The dollar pulled back earlier on the day following somewhat dovish comments from Fed’s James Bullard. He said he believes the FOMC can conquer inflation without cracking the labor market.
Still, the U.S. dollar recovered ground during the New York session as U.S. yields reached fresh cycle highs. The United States 10-Year note rate reached a peak of 4.207%, its highest level since June 2008, while the 2-Year note rate climbed to 4.614%.
From a technical point of view, the XAU/USD short-term bias remains skewed to the downside as the price has posted a lower low and a lower high, while indicators remain in negative on the daily chart.
The RSI has turned flat above oversold territory, while the MACD continues to print bigger red bars, signaling increasing selling interest.
On the downside, the yellow metal could face the next support levels at the $1,620-15 area, followed by $1,600 and then April 2020 lows at the $1,575 zone.
On the flip side, the next resistance point is seen at the $1,650 region, followed by the 20-day SMA at $1,665 and $1,700.