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Gold climbs to fresh seven-year highs near $1,690

  • US 10-year Treasury bond yield is down more than 17% on Friday.
  • US Dollar Index slumps below 96 for the first time since June.
  • Coming up: US Nonfarm Payrolls and Trade Balance data.

The intense flight-to-safety on Friday continues to ramp up the demand for traditional safe-havens such as US Treasury bonds and gold.

With the number of confirmed coronavirus infections surging globally, heightened worries over a protracted global recession force investors to stay away from risk-sensitive assets. As of writing, the XAU/USD pair was trading at $1,687, a little below the seven-year high that it set at $1,690 in the last minutes, and was adding 0.85% on the day.

Reflecting the dismal market mood, the 10-year US Treasury bond yield plummeted to a fresh all-time low below the 0.7% mark on Friday. Since the start of the week, the 10-year T-bond yield is down nearly 35%.

DXY extends fall ahead of NFP

Meanwhile, the greenback also continues to weaken against its peers pressured by the dropping yields. At the moment, the US Dollar Index (DXY) is down 0.65% on a daily basis at 95.98, helping the bullish momentum remain intact.

In the second half of the day, Trade Balance and Nonfarm Payrolls data from the US will be looked upon for fresh impetus. However, it's hard to imagine that a drastic shift in the market sentiment will occur even if these data print much better reading than expected.

Previewing the NFP data, “based on a nine-variable model, non-farm payrolls ought to increase by an average of ~120k/month vs the latest rise of 225k in January," said Nordea analysts. "Consensus is looking for a 190k gain, but we would take the under.”

Technical levels to watch for

 

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