CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

🥇Will gold defend support at $1,765❓

11:36 18 February 2021

Gold is one of the few commodities to trade lower year-to-date. Decline has been driven by US yields rising amid fears of a spike in inflation. Did gold lose its historical inflation-hedge feature?

Gold has been treated as a safe haven asset for years, protecting investors' wealth at times of increased risk on the markets. Precious metal has also been seen as an inflation-hedging asset. Inflation means decline in the value of money, weakening of currency and potential struggles of the economy.

Gold maintains its value over the long-term and does not react to major swings in inflation rate. Moreover, unconventional Fed actions following the Global Financial Crisis have increased the importance of bonds and triggered a potential shift in gold status as a financial asset.

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

We can see on the chart above that following 2009 a significant divergence surfaced between direction of inflation and gold prices. Source: Macrobond, XTB

Please be aware that information and research based on historical data or performance does not guarantee future performance or results. Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk.

What has caused the divergence between gold and inflation? A massive amount of money Fed has pumped into the markets via QE markets has made its way not only to the stock markets but also to the commodity markets - thanks to ETFs among others.

Correlation between gold and US yields has increased significantly over the past dozen or so years. Yields reflect expectations of interest rates. Inflation expectations show that yields may soon return towards the 2% area. In theory, such an increase in yields could trigger a downward correction as big as 10% on the gold market.

Continued increase in US yields triggered by fears of returning inflation could deepend correction on the gold market. Source: Macrobond, XTB

Please be aware that information and research based on historical data or performance does not guarantee future performance or results. Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk.​​​​​​​

Technical situation

Key support for gold can be found in the $1,665 area, where 50% retracement of the March-August 2020 upward move can be found. Continued decline on the TNOTE market could lead to a break below the aforementioned support. Next support levels in line can be found at $1,690 (61.8% retracement) and $1,605 (around 10% below current price). On the other hand, key resistance levels to watch can be found at $1,800 and $1,840 (38.2% retracement). However, gold price rising to such levels would require a significant drop in US yields over the short-term. Source: xStation5

Please be aware that information and research based on historical data or performance does not guarantee future performance or results. Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk.​​​​​​​

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

Back
Xtb logo

Join over 935 000 investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 1 March 2024
__cf_bm cc 1 March 2024
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 28 August 2024
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
muc_ads cc 7 September 2024
lang
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 28 August 2024

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 7 September 2024
UserMatchHistory cc 8 October 2022
bcookie cc 8 September 2023
lidc cc 9 September 2022
lang
bscookie cc 8 September 2023
li_gc cc 7 March 2023

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language