Gold: losses capped by drop in the equities

By FXStreet FXStreet (Mumbai) – Gold prices recovered from the post-NFP low of USD 1116.30/Oz levels due to the losses in the US equities, but stay weak on the rise in the 2-year treasury yield.

Gold recovers as DJIA drops 200 points

The Dow Jones Industrial Average (DJIA) dropped 200 points in the early session, lending support to the yellow metal, which was reeling under the pressure of rising rate hike bets in the US post NFP release. The 2-year treasury yield, which mimics rate hike expectations in the US, currently trades 3.3 basis points higher at 0.733%.

The Wall Street has turned risk averse in line with the losses witnessed in Europe and Asia. Meanwhile, investors are weighing in the possibility of Fed raising rates this year on dropping unemployment rates or postponing due to weakness in the equities.

The metal now trades around USD 1120/OZ levels; down 0.4% on the day. Heading into the weekend, the traders are unlikely to make big commitments in the metal as the US markets stay closed on Monday, while Chinese traders return to the markets.

Gold Technical Levels

The immediate support is seen at 1118.40 (Aug 27 low), under which the metal could drop …read more

Source:: FX Street