Gold Prices Retreat Amidst Strong Dollar and Rising Treasury Yields

Gold prices retreat amid strong dollar and rising Treasury yields, while Nasdaq 100 remains resilient. Crude oil stabilizes.

Gold prices experienced a setback on Monday as the pressure from escalating U.S. Treasury yields and a strengthening U.S. dollar intensified. This decline followed a series of robust U.S. economic indicators, including January’s non-farm payrolls and ISM services PMI. Additionally, remarks from Federal Reserve officials indicating a reluctance towards a rate cut in March contributed to the decline in bullion prices.

Technically, the XAU/USD pair slipped below its 50-day simple moving average after Monday’s pullback but remained above the critical horizontal support level at $2,005. Analysts suggest that this technical floor must hold for sentiment towards gold to improve. Failure to do so could encourage sellers to target the $1,990 mark, with further downside pressure potentially leading to a test of $1,975.

In the event of a bullish reversal in the near term, the first line of defense against further advances stands at the $ 2,032 50-day simple moving average. Should prices rise, the following significant resistance levels, corresponding to the late December highs, lie at $2,065 and $2,085.

Gold Prices Retreat Amidst Strong Dollar and Rising Treasury Yields

Crude Oil Prices Find Stability After Early February Decline

Crude oil prices, represented by WTI futures, declined sharply in early February, erasing most of the gains from the previous month. However, there are signs of stabilization, as prices rebounded from a short-term uptrend originating from the December lows. If this bounce gains momentum, we expect initial resistance near $73.50, followed by $75.50.

Conversely, if sellers regain control and push oil prices below trendline support at $72.50, a retracement towards $69.35 could be on the horizon. While a retest of this level may provide support, a breakdown could exacerbate the bearish momentum, potentially leading to a drop toward $67.25.

Nasdaq 100 Remains Resilient Despite Rising Treasury Yields

The Nasdaq 100 exhibited limited movement on Monday despite the surge in U.S. Treasury yields, with select mega-cap stocks such as Apple, Alphabet, and Nvidia propping up the entire market. Although the tech index continues to follow a solid uptrend, further upward movement may face obstacles if Treasury yields continue to rise, urging traders to exercise caution.

Key technical thresholds indicate that the first resistance to monitor lies around 17,800, closely aligned with the all-time highs. A breakthrough above this critical level could pave the way for a rally towards 18,050. Conversely, if the Nasdaq 100 retreats, analysts identify support levels at 17,450 and 17,185, with further downside pressure possibly leading to a test of 16,775.

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