The
yellow metal is losing ground, suffering once again from the
accelerated rise in bond yields in the face of renewed concerns about
inflation and interest rates.
At
the same time, Janet Yellen warned of a risk of default on US debt for
the first time in history if the budget deficit ceiling is not raised by
October 18.
The
U.S. bond market continued to a selloff for the fourth straight
session, keeping yields on the rise. The yield on 2-year Treasuries rose
to 0.3147%, its highest level since March 2020, the 5-year rose above
1% for the first time since February 2020, and the 10-year is up more
than six basis points to 1.5444% after reaching its highest level since
June at 1.561%.
In
the medium term, prices are evolving within a bearish channel, so an
acceleration towards the lower bound should not be excluded. Moreover,
the polarity zone around $1,690/$1,680 is a major threshold for the
future. Indeed, the market has come to support this level several times
before rebounding.
(Chart Source: Tradingview 28.09.2021)
To
sum up, a sell-off seems to be taking place and the macroeconomic
outlook does not benefit the yellow metal in the current context. Chart
analysis suggests a deeper correction ahead, so it will be wise to wait
for a return to the $1,680 area before attempting to buy on the cheap.
Disclaimer:
This material has been created for information purposes only. All views
expressed in this document are my own and do not necessarily represent
the opinions of any entity.