XAUUSD : Rising yields a headwind for gold

Gold is on track for its worst month since February, but why? The precious metal faces one of its most prominent headwinds, rising real yields. As a non-yielding asset, Gold must compete with the risk-free return that U.S. Treasuries provide. Furthermore, the difference between Treasury rates and the inflation rate provides what is known as the Real Yield.

According to the St. Louis Fed Economic Research, Real Yields turned positive in October 2021 and peaked in March 2023, Gold struggled this February as Real Yields surged into that peak. After slipping into June, Real Yields have risen sharply, bringing renewed pressure on the precious metal.

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➡️The dollar fell in cautious trading as investors assessed the US jobs data, which included signs of slowdown, which reinforced expectations that the US Federal Reserve has probably reached the end of the monetary tightening cycle.

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ECB President Lagarde: At a time when people are paying the most attention, central banks must deliver their key communications to ensure these expectations remain firmly anchored.

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➡️JPMorgan Bank raises its forecast for inflation in Turkey by the end of the year to 65% from a previous forecast of 62% after inflation data for August came out higher than expected.

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➡️Michael Burry has now lost approximately -42% of his bet ($1.6 billion) against the S&P 500 and Nasdaq.

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🕯 SELL GOLD |  1924 - 1926

🔴 SL: 1930

🟢 TP1: 1920
🟢 TP2: 1915