The Gold Price has come under pressure again on Thursday

: George Solotarov; 21 April 2022; Hits: 419

The Gold Price has come under pressure again on Thursday

After stabilizing on Wednesday, spot gold (XAU/USD) prices are in retreat once again and eyeing a break below the $1940 level and a test of their 50-Day Moving Average in the $1930s. Hawkish chatter from the usually dovish leaning Vice President of the ECB Luis de Guindos, who hinted towards a possible rate hike in July, echoing the sentiment of some of his more hawkish ECB policymaking colleagues earlier in the week, ignited a rally in Eurozone bond yields that has also seen US yields push higher. The US 10-year was last up 4 bps on the day and eyeing a push back above 2.90% and towards multi-year highs set earlier in the week close to 3.0%.

Higher yields increase the "opportunity cost" of holding non-yielding assets such as gold, hence why precious metals markets have come under pressure once again on Thursday.

Central bank policymaker rhetoric looks set to remain in the spotlight for the remainder of Thursday's session, with Fed, ECB, and BoE speakers all giving remarks later in the day. Most notably, Fed Chair Jerome Powell will be rating at 1600BST and again at 1800BST alongside ECB President Christine Lagarde. As markets become increasingly fatigued with the geopolitical news flow relating to the Russo-Ukraine war and focus shifts more intensely to central bank tightening and the prospect of higher interest rates/tighter financial conditions, XAU/USD bears may target a drop back towards the low $1900s, and perhaps even a test of last months lows in the $1890 area. At the very least, XAU/USD seems likely to remain wedged within a $1900-$2000ish range for the foreseeable future.