Gold Intermarket: Range bound treasury yields aid rally

The flat/range bound action in the treasury yields is fuelling the rally in the gold.

The 2-year treasury yield, which mimics short-term interest rate expectations, clocked a high of 1.304% on December 15 and since then has been restricted to a narrow range of 1.15% to 1.30%. Over the same time period, gold rallied from $1127 (Dec 15 low) to $1224.20 (previous day’s high).

The metal may rally further if the US wage growth figures disappoint expectations…leading to a drop in the treasury yields.