XAU/USD recovers from a five-month low above $1800 as US yields fall
- Gold prices pare daily losses while dollar surges on risk aversion.
- US yields plummet amid recession fears.
- Silver is also recovering and is “only” down 2.60%.
Metals rallied during the US session amid a collapse in US yields. The rally in Treasuries boosted gold, which pulled silver higher. XAU/USD is hovering around $1,800/oz, far from the daily low.
Yields fall, which helps gold, which helps silver
US yields edged lower. The 10-year US Treasury bond fell as low as 2.79%, its lowest since late May (it was trading above 3.00% earlier on Friday), while the 30-year tumbled to 3.02%.
Recession fears are tempering Fed tightening expectations. The bond market shows more concerns than the stock market on Friday. On Wall Street, the Dow Jones is down 0.56% and the Nasdaq is down 0.49%.
The sharp drop in yields pushed gold back above $1,800, easing bearish pressure. XAU/USD bottomed at $1,784, its lowest since late January. It’s still down for the day and about to post its lowest weekly close in months. The area around the 2022 low at $1,780 is a critical support.
Silver also reduced the losses dragged up by gold. XAG/USD hit its bottom at $19.38, a level not seen since July 2020, and is trading at $19.75, down 2.60%. The price is below the 200-week moving average for the first time since May 2020.