Gold losing height in Asia as treasury yields rise

Gold is losing height in Asia as hardening treasury yields suggest Wednesday’s Fed policy statement may up the ante on the rate hike talk.

Rejected at hourly 200-MA

Prices failed to hold above hourly 200-MA level of $1330/Oz and retreated to $1323/Oz levels. The offered tone strengthened as yield on the 2-yr Treasury note in the US, which mimics short-term rate hike bets, ticked up two basis points. The benchmark 10-yr yield also advanced 1.7 basis points.

Fed rate hike bets have gone up recently in response to strong non-farm payrolls, advance retail sales and housing data releases. Markets thus fear the Fed statement may carry a hawkish tone, especially as equities trade at record highs

Gold Technical Levels

A breakdown of immediate support at $1320.50 (hourly pivot S1), under which losses could be extended to $1312 (hourly pivot S3). A violation there could yield $1300. On the higher side, hourly 200-MA at $1330 would offer resistance, which if taken out could yield $1334 (daily pivot R3). Further gains could be stalled by resistance at $1355.60 (June 24 high).