2024 March, 26, 10:36:23 PM

Gold Ascends As US Dollar Grip Loosens, US Yields Fall

Share with -

Gold prices have been exhibiting an upward trend in recent trading sessions, propelled by a combination of a weakening US Dollar and declining US Treasury yields.

Factors Contributing to Gold's Rise

  • Weakening US Dollar: The US Dollar Index (DXY), which measures the Greenback's strength against a basket of six other major currencies, has been trading sideways, providing some headroom for gold to appreciate.
  • Falling US Treasury Yields: Interest rates on the 10-year US Treasury benchmark have declined, reducing the opportunity cost of holding non-interest-bearing assets like gold.

Mixed US Economic Data

The US economic outlook remains uncertain, with mixed data providing both bullish and bearish signals for gold:

  • Robust Durable Goods Orders: February's Durable Goods Orders surged by 1.4% MoM, exceeding expectations and indicating strong business investment.
  • Weakening Consumer Confidence: The Conference Board's Consumer Confidence Index dropped in March, reaching its lowest level in four months due to concerns about rising prices and soaring borrowing costs.

Impact on Gold Price

  • Gold's upward trajectory has faced some resistance as the US Dollar stabilizes.
  • However, the decline in Treasury yields has continued to provide support for the precious metal.
  • At the time of writing, XAU/USD is trading at $2,177, reflecting a gain of 0.31% on the day.

Technical Analysis

  • Support: $2,146, $2,088
  • Resistance: $2,200, $2,223

Gold price remains above the crucial $2,170 level, indicating a bullish trend. However, a break below $2,146 could trigger a sell-off toward $2,100.

Interest Rates and Gold

  • Higher interest rates generally weigh down on gold prices, as they make interest-bearing assets more attractive.
  • Falling interest rates, on the other hand, boost gold's allure.
  • The Federal Reserve is expected to cut interest rates in 2024, which could further support gold prices.


  • What are interest rates? Interest rates are charged by financial institutions on loans to borrowers and paid as interest to savers and depositors. They are influenced by base lending rates set by central banks to manage inflation.
  • How do interest rates impact currencies? Higher interest rates make a country's currency more attractive to global investors, leading to currency appreciation.
  • How do interest rates influence gold prices? Higher interest rates reduce the opportunity cost of holding non-interest-bearing assets like gold, putting downward pressure on prices. Falling interest rates have the opposite effect.
  • What is the Fed Funds rate? The Fed Funds rate is the overnight rate at which US banks lend to each other, set by the Federal Reserve. It is a key indicator of future monetary policy expectations.

Gold prices have been rising due to a weaker US Dollar and declining US Treasury yields. Mixed US economic data has provided both support and resistance to the trend. Technical analysis suggests a bullish bias, with key support and resistance levels to watch. Interest rate expectations will continue to be a major factor in shaping gold price dynamics in the coming months.

Share To -
Please Sign in to make a comment.
  • Trending market news & market moves
  • Forex Forecast & Analysis
  • Experts opinions
  • Upcomming Webinars & Seminars
Subscribe to Our Newsletter