Gold's Rally Faces Key Test as Yields and Oil Slide
Gold is testing its 100-day moving average after dropping 1.3%, diverging from falling Treasury yields and weaker oil prices.
Gold's recent rally is showing possible short-term exhaustion after the metal failed to rise meaningfully despite weaker oil prices and falling Treasury yields. It is testing its 100-day moving average following weaker-than-expected US retail sales, but price action has been less convincing than the macro backdrop suggests.
Earlier in August, gold largely moved in tandem with lower yields and softer oil as markets priced a more dovish Federal Reserve outlook.
On Thursday, that relationship changed: gold fell 1.3%, Treasury yields dropped 5 basis points, and oil declined about $2. The divergence may reflect profit-taking after strong gains, but it could become a warning signal if gold continues to struggle while yields and oil remain lower.
A sustained break and weekly close above the 100-day moving average would help restore the bullish outlook.
Source: First Squawk