Gold hits fresh highs, yields retreat

Gold continues to trade with an uptrend bias on Monday after breaking above key resistance last Friday in the $1814 per ounce.

Prices surpassed $1820 earlier in the U. S. session, the highest level in over two months. Gold bulls will now be eyeing a move back to test resistance in the $1830.

The said area is that spot prices tried and failed to break above on between July and early September. To the downside, there is support in the form of the October highs around $1810.

Decline of U. S. real yields continue to head lower on Monday, with the 10-year yields down roughly 2bps on the session and back below -1.10%. Gold has a negative correlation to real yields; as yields decline, this reduces the opportunity cost for investors in holding non-yielding precious metals, thus boosting their appeal.