The yellow metal struggles to find consistent bullish momentum. One of the gold market analyst said that investors should stop paying attention to the irrational selloff in the bond market and instead focus on long-term fundamentals as global deficits and debt continue to grow.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that gold investors have an unhealthy focus on 10-year bond yields. He also said that once the spotlight shifts away from the bond-market selloff, he expects gold prices to continue to move higher.

Although 10-year yields have recently pushed to a 13-month high, representing the most considerable risk for the gold market, Milling-Stanley said that he is not convinced that the bond market selloff is sustainable in the long-term.

“I know two people who are not completely confident about the robustness of the economic recovery. One of them is me, which is not very important. And the other one is Jerome Powell, the chair of the Federal Reserve,” he said.

 In US, the preliminary PMI readings for March have been mostly stronger than expected which favors the greenback but Fears of slower economic recovery out of the coronavirus (COVID-19) and decrease of bond purchasing, as well as a rate hike, were among the major challenges to the market sentiment. Also on the negative side were US-China trade war fears and Beijing’s tussles with the Western leaders, comprising the US, the UK, Canada and the European Union (EU) and  new lockdowns in Germany, France, and Italy and rising cases in many US states.

On the other hand, US President Joe Biden’s vaccine optimism over a $3.0 infrastructure plan to keep the traders hopeful. Adding optimism to the market is the news that the US Senate is voting to extend the Paycheck Protection Program (PPP) beyond March expiry. Also, Australia’s easing of the covid restrictions and American policymakers’ rush to join links with Western friends, also connecting with ex-China allies in Asia, favors the market sentiment.

XAU/USD 4 Hour Chart:

Support: 1725.9 (S1), 1717.5 (S2), 1711.3 (S3).

Resistance: 1740.5 (R1), 1746.8 (R2), 1755.2 (R3).

Gold struggles and shows a bullish trend against greenback amidst of all the catalysts creating mixed sentiment for greenback. We expect a bullish trend for XAU/USD.