Gold loses its shine as T-yields clock one-year high

Gold prices are losing height in Asia as the incentive to hold the yellow metal is falling fast with the treasury yield trading at one-year high.

Gold trades at lowest level since June

The metal clocked an Asian session low of $1208.35/Oz levels, the lowest since early June. The selling gathered pace in the overnight trade after the upbeat US data releases and the hawkish comments from Fed’s Yellen pushed the Dec rate hike bets close to 100%.

Moreover, this pushed the 10-year treasury yield to a one-year high of 2.33%. Rise in the long-term rates reduces the incentive to hold the yellow metal, unless there is a risk-off in the equity markets.

As of now, the Asian equities are trading upbeat, although S&P 500 futures are looking wobbly. The metal remains at the mercy of the treasury yields on the last trading day of the week.

Gold Technical Levels

A break below the psychological level of $1200 would open doors for $1182 (Dec 2013 low) under which a major support is seen directly at $1133 (Nov 2014 low). On the higher side, previous month’s low of $1249 if breached would expose $1280 (Mar 2016 high). A violation here could yield a re-test of $1338 (monthly high).