Gold retreats to $2,026.93, facing pressure from a strengthening US Dollar and Treasury yield uptick.

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• Gold retreats to $2,026.93, facing pressure from a strengthening US Dollar and Treasury yield uptick.
• Market reevaluates Fed rate cut timeline with June odds at 50% for a potential easing.
• The US 10-year Treasury yield hovering around YTD highs keeps Gold’s price capped.

Gold price retraces after hitting the 50-day Simple Moving Average (SMA) at $2,033.67 during the European session and is down 0.40% as the Greenback (USD) dives. However, a rise in the US 10-year Treasury yield and traders trimming their odds of a dovish US Federal Reserve (Fed) sponsored a leg down in the non-yielding metal. The XAU/USD trades at $2,026.93 after hitting a high of $2,037.07.

Sentiment remains mixed, though tilted slightly negative, favoring the US Dollar. Interest rate speculators have priced out a Fed rate cut in March and May. For June, the odds of a quarter of a percentage point rate cut are at 50%. The US 10-year Treasury note climbs four-and-a-half basis points to 4.295%, shy of reaching the year-to-date (YTD) high of 4.354%, though keeping the yellow metal pressured, as investors align themselves with Fed officials’ posture of three rate cuts toward the end of 2024.

Monday sees a repeat of Friday’s note: “Gold has shifted to a neutral-upwards bias as it hurdles the 50-day Simple Moving Average (SMA).”

Even though XAU/USD has failed to cling above the 50-day SMA, the bias is intact unless Gold falls below the February 16 swing low of $2,016.15, which would exacerbate a challenge of the October 27 daily high-turned-support at $2,009.42. Once cleared, that will expose key technical support levels, like the 100-day SMA at $2,007.82, followed by the 200-day SMA at $1,966.79.

On the flip side, buyers dragging the XAU/USD spot price above the 50-day SMA could pave the way to challenge the $2,050 figure. Once those levels are cleared, up next would be the February 1 high at $2,065.60, ahead of the December 28 high at $2,088.48.

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