E Gold Prices Extend Gains As Treasury Yields Decline

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correlation of gold and treasury yield

The chart below was used to present the gold short-term outlook to members. We have been looking 1765 for a long time. Only one weekly close below 1765 occurred in the final minutes of Friday, when prices fell from 1769 to 1760 to end the week. We've identified members that this is a possible bear trap with 90% of probability. Finally, gold prices have continued to rise from the 1750 level. If gold breaks 1931, it will confirm the inverted head and shoulder pattern, indicating that new highs are on the way.

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On very short term charts, the 10-year Treasury yields have dropped sharply and have broken through support. Treasury yields are intimately connected to the US dollar and gold. Lower Treasury yield produced another indication for US dollar weakness. On yearly, monthly, and weekly charts, the US dollar has produced strong bearish patterns, and the US dollar is likely to break down soon. The highly correlated instrument EURUSD can be used to observe the weakness of the US dollar index. The EURUSD has a strong bullish outlook, since the US dollar index has a strong bearish outlook. Falling yields and a weakening US dollar are both signs for gold bulls. Gold's short, medium, and long-term outlooks are all bullish, and prices are on their way to new all-time highs.

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