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Gold holds above $4,400 as Treasury sets 10- and 20-year buyback
The US Treasury plans to buy up to $6 billion of securities for the September 10 auction, while traders weigh upcoming US inflation and jobs data.
Gold rose more than 1% on Wednesday, holding near $4,400 even as the US dollar pared earlier losses, according to FXStreet. The move comes as investors look ahead to fresh US inflation data.
Support for gold has been linked to the Treasury Department announcement of a bond buyback ahead of the September 10 auction for 10- and 20-year instruments. FXStreet said the plan aims to purchase up to $6 billion of outstanding securities in the 10- to 20-year tranche.
FXStreet also pointed to higher Treasury yields after the buyback announcement as a headwind for gold, with the 10-year benchmark note rising five basis points to 4.845%. Traders are simultaneously focused on a US ADP Employment Change 4-week average reading, plus other scheduled labor and sentiment releases, as rate expectations continue to shift.
On the technical side, FXStreet reported gold bounced off support around the 100-day simple moving average near $4,343, but faces resistance at $4,425, the high from September 8. The article said a move above $4,500 would shift attention to the 200-day SMA around $4,537, while a drop back under $4,400 would test lower support levels starting with the 100-day SMA again.
Latest closeGold $4,395.60 ▼0.8%