Gold consolidated around the $2,020 mark in Tuesday's trading session after falling on Friday, as swings in risk sentiment appeared to be driving the precious metal's pricing.
Treasury yields have moved higher since the Federal Open Market Committee (FOMC) raised its target rate by 25 basis points to 5-5.25% last week.
The benchmark 2-year note was as low as 3.66 percent last Thursday, but has risen to 4 percent today.
On the same day Treasury yields bounced higher from their lows, gold hit a 33-month high of $2,085.4 on the COMEX futures exchange before slipping.
Similarly, real yields have recently appeared to be inversely correlated with gold. The 10-year Treasury rate hit 1.29 percent overnight, well above last week's low of 1.11 percent.
The real yield is the nominal yield minus the market-priced inflation rate for Treasury inflation-protected securities (TIPS) of the same maturity.
WTI crude also reflects this reversed price action as the market awaits Wednesday's U.S. CPI data for clues on the future path of interest rates from the Federal Reserve. A Bloomberg survey of economists expects headline inflation to rise 5.0 percent year on year by the end of April.
As gold has retreated, so has volatility. The GVZ index measures gold volatility in a similar way to how the VIX index measures the volatility of the S&P 500.
GC1 (Gold futures) WTI crude oil, US 10-year real yield, Gold volatility, US Dollar
Gold is still in the uptrend channel that began last November.
Last week's high of 2085.4 broke the March 2022 high of 2078.8, but still did not break the all-time high of 2089.2. This may indicate that the 2080-2090 region may provide an area of resistance.
A break above that level could open the way to testing the uptrend line, which is currently cut at 2130.
A bullish triple moving average (TMA) formation requires a price higher than the short-term simple moving average (SMA), which is higher than the medium-term SMA, which is higher than the long-term SMA. All SMAs also need to have a positive gradient.
Today's price action this week has seen the 10-day moving average cross above the 21-day moving average and the 200-day moving average cross above the 260-day moving average. These are called golden crosses.
This development means looking at any combination of the daily SMA that meets the criteria of the TMA. A closing price below any SMA will invalidate the TMA.
On the downside, prior lows 1980.9, 1945.0 and 1936.5 May provide support before the current uptrend at 1915. The 100-day moving average is located near this trend line and could add support nearby.
