Gold prices edged higher for the first time in four sessions after the rally in U.S. treasury yields paused, weighing on the dollar which eased from two-month highs.
The 10-year US treasury yield hit 3% for the first time since 2014 but the move higher was met with struggle, pressuring the benchmark treasury yield to retreat below 3%, dragging the greenback lower.
That supported a move higher in gold prices but sentiment on the yellow metal remained negative to a certain extent amid growing investor expectations that the Federal Reserve could hike rates three more times this year.
Gold daily chart has formed “Rising wedge” patterns. The last few sessions seems consolidated retesting near a key support holding at 31250 inside the channel. The market is expected to continue in bearish momentum, once the same breaks below the key support. The downside rally could test all the way through 31200-31000 levels in the upcoming sessions. Alternatively, if the key support holds strong then the market might retest the same and turn bullish once again. The upside rally could test 31400- 31650 levels. Key resistance holds at 31550 – 31650.
MCX Gold closed flat on Tuesday, after a Conference Board report Tuesday, showing that the U.S. consumer confidence index rose to 128.7 in April from a revised 127.0 in March. On the daily chart, price has taken a support of middle Bollinger band, which indicate reversal in price . In addition, price has sustained above 50 days SMA ; which intimate medium term trend remains bullish. Therefore, we expect positive movement in the gold towards 31500 – 31600.
Gold Technical Chart: