Gold traded low on Monday, weighed down by a strengthening U.S. dollar and a rise in U.S. Treasury yields.
The dollar rose to a seven-week high, increased by a rise in U.S bond yields. Bond yields have risen to their highest levels in four years, as inflation has added to expectations of continued rate hikes from the Federal Reserve.
The yield on the benchmark United States 10-Year Treasury note reached its highest level since January 2014 on Monday, at 2.975. The United States 2-Year note rose to 2.474, a level not seen since September 2008.
Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
MCX GOLD Technical outlook
Gold daily chart has formed “Rising wedge” patterns. The last few sessions been bearish in trend after retesting the channel’s resistance slope line. The market is expected to continue in bearish momentum, testing all the way through 31200-31000 levels in the upcoming sessions. Alternatively, if the market breaks above a key resistance holding at 31350 then it might turn bullish. Key support holds at 31000.
Crude oil prices edged higher on Monday as investors considered bearish comments from Iran concerning an extension to the output-cut agreement against a drop in global oil supplies.
Irans oil minister Bijan Zanganeh claimed that a continued rise in crude oil prices would nullify the need to extend the OPEC-lead deal. Zanganeh confirmed Iran was exporting just over 2.5 million barrels per day, which is around a 30% increase from March levels.
Nat Alliance Securities Energy Specialist Leo Mariani said – “New Iranian sanctions in May would likely be the catalyst needed to encourage long-term buyers to revisit US E&P’s in a more serious way and could lead to materially higher oil prices, erase the backwardation in crude and provide a path for prices to stay elevated for quite some time,”.
MCX CRUDE OIL Technical outlook
Crude oil daily chart has formed “Ascending broadening wedge” pattern. The last few sessions ended up consolidated but bullish in trend. The market is expected to continue in bullish momentum, testing all the way through 4620-4650 levels in the upcoming sessions. Alternatively, the market might also have a chance on giving a correction over negative momentum. Key resistance holds at 4650 and support at 4400.