gold daily
Gold is currently trading at its highest level since the drop on June 7.
Initially, the chart indicated a potential head-and-shoulders pattern forming, suggesting a bearish trend. However, the bulls have staged a comeback, and if the price rises above $2387, it could invalidate this pattern.
This week’s turnaround in gold prices may have been influenced by a recent survey from the World Gold Council. The survey revealed that 29% of central banks are planning to increase their gold holdings in the coming year, marking the highest percentage since the survey’s inception in 2018. Previously, gold prices had dropped following reports that the People’s Bank of China (PBOC) had paused its gold-buying spree.
Interestingly, the traditional relationship between gold prices and yields appears to be breaking down. Despite a 6.4 basis point increase in 10-year yields today, gold is experiencing its strongest trading day in over a month.
### Central Banks’ Interest in Gold
The increased interest from central banks to add to their gold holdings could signal a shift in sentiment towards the precious metal. Central banks are often seen as key players in the gold market, and their actions can have a significant impact on prices. By noting the central banks’ intentions to increase their gold reserves, investors may interpret this as a bullish sign for gold moving forward.
### Decoupling of Gold Prices and Yields
The disconnect between gold prices and bond yields is a notable development in the current market environment. Typically, gold and yields have an inverse relationship, where rising yields lead to lower gold prices. However, the recent divergence, with gold prices surging despite an increase in yields, suggests that other factors may be at play influencing the precious metal’s performance. This highlights the complexity of factors that can impact gold prices beyond traditional market correlations.
