Commodity Market: Gold trades near a seven-week high as US Dollar and Treasury yields fall to one-month lows

Spot Gold was holding near recent seven-week highs on Friday, as the US Dollar and US Treasury yields retreated to lows unseen in almost a month after the US government imposed a wide range of sanctions on Russia over alleged interference in last year’s presidential election.

A weaker dollar makes Gold more affordable for international investors holding other currencies, while lower bond yields reduce the opportunity cost of holding the non-yielding metal.

Gold was also on track to register its biggest weekly gain since the business week ending March 12th due to inflationary concerns stemming from an environment of huge fiscal stimulus packages and ultra-accommodative monetary policies around the world.

As of 9:15 GMT on Friday Spot Gold was edging up 0.15% to trade at $1,766.43 per troy ounce, while moving within a daily range of $1,759.92-$1,767.53 per troy ounce. Yesterday it rose as high as $1,769.66 per troy ounce, which has been its strongest price level since February 26th ($1,775.90 per troy ounce).

The precious metal looked set to register its second straight week of gains, while being up 1.30%. Gold has risen 3.44% so far in April, following a 1.55% drop in March.

Meanwhile, Gold futures for delivery in June were inching up 0.01% on the day to trade at $1,767.00 per troy ounce, while Silver futures for delivery in May were up 0.09% to trade at $25.988 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.07% to 91.602 on Friday, while hovering just above yesterday’s one-month low of 91.493.

In terms of macroeconomic data, today Gold traders will be expecting the preliminary results from Thomson Reuters/University of Michigan’s monthly survey on US consumer sentiment for April due out at 14:00 GMT as well as the March data on housing starts due out at 12:30 GMT.

Near-term investor interest rate expectations were little changed. According to CME’s FedWatch Tool, as of April 16th, investors saw a 93.3% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on April 27th-28th, down from a 94.4% chance on April 15th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,755.98
R1 – $1,777.48
R2 – $1,791.16
R3 – $1,812.65
R4 – $1,834.14

S1 – $1,742.31
S2 – $1,720.81
S3 – $1,707.13
S4 – $1,693.46