The reports showed that inflationary pressure was slowing down. As a result, bond traders rushed to buy Treasuries, pushing their yields lower. The yield of 2-year Treasuries declined towards the 4.15% level, while the yield of 10-year Treasuries settled below 4.65%.

Typically, falling Treasury yields provide support to gold that pays no interest. Today, traders preferred to use the encouraging Producer Prices report as an opportunity to take some money off the table.

U.S. dollar moved lower against a broad basket of currencies as traders focused on falling Treasury yields. Weaker dollar did not provide any support to gold markets in today’s trading session.

In case gold settles back below the $4350 level, it will move towards the $4300 level. If gold declines below $4300, it will head towards the support at $4180 – $4200.

On the upside, gold needs to settle back above the resistance at $4360 – $4380 to have a chance to gain upside momentum in the near term. In this case, gold will move towards the next resistance level at $4480 – $4500.

Silver Attempts To Settle Below The $65.00 Level