The price of COMEX gold futures is down 1.39% at $1,849.5 per troy ounce on mid-Monday trades.
Gold started the week on a bearish note, correcting sharply from its past five-week peak of $1,879. The inverse correlation between the yellow metal and the US treasury yields is back in play. The benchmark 10-year yields are trading at their highest level since 2018 on bets that the Fed will go for a 75bps rate hike to curb rampant inflation. Gold prices has been boosted by years of a recession and a drop in long-term yields.
The U.S. 10-year Treasury yields and the dollar soared recently, making gold more expensive for overseas buyers. The Fed’s June meeting outcome could be key for gold. Markets have priced 80% odds of a half-point increase and 20% odds of a 75-basis points hike.
On the technical side, the RSI of COMEX gold futures stood at 45.82 and is currently trading below all SMAs: MA (5), MA (20), and MA (50). SO, SELL position can be taken with the following target and stop-loss:
TRADE SIGNAL: COMEX GOLD FUTURES – SELL: 1835, TARGET: 1800, AND STOP-LOSS: 1860