Gold dips in Asia as long duration bond yields rise

Rise in long duration government bond yields across Asia and advanced world on the back of oil rally is hurting gold.

Gold below 200-DMA

At the time of writing, gold was down 0.13% at $1258/Oz levels. The 200-DMA level stands at $1261 levels.

Oil rose to one-year high after Russian President Putin backed output freeze accord. This resulted in a spike in the long duration bond yields. The 40-yr Japanese yield rose to highest since mid September.

Meanwhile, in US the 10-yr yield and 2-yr yield advanced at least three basis points each. It remains to be seen if the steepening of the yield curve leads to equity market losses as such a move could trigger haven demand for the metal.

Gold Technical Levels

Break above 200-DMA level of $1261 could yield a re-test of $1269 (Oct 6 high), above which the metal could target $1283 (100-DMA). On the lower side, breach of Asian session low of $1255 would expose $1250 (Oct 6 low) and $1241.50 (Friday’s low).