Gold draws bids as US yields drop
- Gold is reporting moderate gains with US yields and dollar index felling the pull of gravity.
- Big gains may remain elusive as an easing of US-Iran tensions is boding well for equities.
Gold is looking to regain poise in Asia with US treasury yields flashing losses.
The yellow metal is currently trading at $1,560 per Oz, representing a 0.28% gain on the day, having hit a low of $1,552 during the overnight trade.
US yields drop
The uptick in the yellow metal could be associated with the softer treasury yields. At press time, the 10-year yield is trading at 1.86% – down 1.2 basis point on the day. Gold and yields usually move in opposite directions.
Also, the US dollar, gold's biggest nemesis, has come under pressure over the last couple of hours. The dollar index, which tracks greenback's value against majors, is currently seen at 97.26 – down 10 pips from the overnight highs near 97.40.
Easing geopolitical tensions
President Trump on Wednesday announced fresh economic sanctions on Iran and refrained from calling military action in response to Iran's strike on several US military bases in Iraq.
As a result, geopolitical tensions eased, pushing US stocks higher. The Nasdaq index hit record highs and the S&P 500 and the Dow Jones Industrial Average gained 0.5% each.
Asian markets are also witnessing risk reset with Japan's Nikkei currently reporting a 1.8% gain. The Shanghai Composite is also up nearly 1%.
Gold, therefore, is unlikely to see big gains. The yellow metal created a big bearish engulfing candle on Wednesday, signaling bullish exhaustion and making Thursday's close pivotal.
A short-term bearish reversal would be confirmed if prices end Thursday below the engulfing candle's low of $1,552.
Technical levels