Gold strengthens as treasury yields retreat

Gold is extending Tuesday’s gains in Asia as the Treasury yields in the US retreat despite the strong US advance retail sales release.

Stuck at 5-DMA

Prices rose from $1226.06 but failed to take out the 5-DMA hurdle of $1233.30 levels. The uptick is accompanied by a three basis point drop in the 10-yr yields and a two basis point drop in the 2-yr yield.

Moreover, the rally in the yield appears to be fizzling out, given the strong US retail sales data failed to push up yields yesterday, The metal remains at the mercy of the treasury yields and US dollar index.

Gold Technical Levels

A break above $1233.30 (5-DMA) would open doors for $1241.50 (Oct 7 low) above which the prices could target $1253 (23.6% of 2011 high – 2015 low). On the other hand, a breach of the session low of $1226 would expose $1218 (Nov 15 low) and $1211.41 (Nov 14 low).