GOLD & CRUDE OIL TALKING POINTS:
- Gold prices rise as US bond yields, Dollar fall after record debt sale
- Crude oil prices drop, talked down by officials from China and Iran
- Chart setups hint gold may be set to bounce as crude oil suffers losses
Gold prices rose yesterday as the US Dollar retreated alongside Treasury bond yields after hitting a 13-month high intraday. That helped the yellow metal leverage its appeal as an anti-fiat and non-interest bearing alternative. The move came after demand held impressively steady despite a record-setting offering of $26 billion in 10-year notes.
The bid-to-cover ratio registered at 2.55, only a hair lower than the 2.57 reading recorded at the prior sale of comparable paper. Investors seemed to interpret the outcome to mean that the oncoming flood of new issuance needed to finance the widening budget deficit will find healthy take-up. That sent US debt prices higher, trimming baseline borrowing costs.
GOLD TECHNICAL ANALYSIS
Gold prices edged above trend line resistance set from mid-June, hinting an upswing may be in the works. The appearance of a bullish Morning Star candlestick pattern and positive RSI divergence reinforce the case for a rebound. A break above range floor support-turned-resistance at 1221.25 opens the door for a test of the 1236.6-40.86 area. Immediate support is at 1204.59, the August 3 low.