Gold plummets to fresh nine-day lows near $1,492 on surging US T-bond yields
- Kansas Fed President George prefers to keep rates unchanged.
- 10-year US Treasury bond yield gains more than 2%.
- US Dollar Index clings to small daily gains near 98.30.
The XAU/USD pair came under renewed bearish pressure in the last hour and broke below the critical $1,500 as the rising US Treasury bond yields made it difficult for the safe-haven gold to find demand. After dropping to a session low of $1,492.58, the pair recovered slightly and was last seen trading near $1,495, losing 0.5% on the day.
Hawkish Fed commentary lifts T-bond yields
In an interview with Bloomberg today, Kansas Fed President Esther George argued that it was not the time for accommodation citing strong labour market and added that she would prefer to leave the rates unchanged. "Businesses are still reporting issues finding workers, we are seeing higher wages," George added.
These comments seem to have provided a boost to the US Treasury bond yields. The 10-year reference, which spent a large portion of the day moving sideways, is now up 2.83% on the day at 1.622%.
George's hawkish comments also allowed the US Dollar Index (DXY) to stay in the positive territory despite the sharp rise witnessed in the GBP/USD pair. As of writing, the DXY was up 0.05% on the day at 98.30.
Later in the day, the IHS Markit's preliminary Manufacturing and Services PMI reports from the US will be looked upon for fresh impetus. Additionally, markets will be keeping close eye on Wall Street's performance to get a sense of the market sentiment. At the moment, the S&P 500 Futures is up 0.15% on the day, pointing out to a positive opening in the major US equity indexes.
Technical levels to watch for