Gold remains trapped in the converging rage of the past year, but with US Real Yields and the USD expected to rise, strategists at Credit Suisse see the risk to the downside in 2022.

Rising US Real Yields and a strengthening USD are expected to weigh on gold

“Below $1,759/54 is needed to clear the way for a retest of key price and retracement support from the lower end of the range at $1,691/77. Only below here though would see a major top established to mark an important change of trend lower, with support then seen at $1,620/15 initially, before $1,572/61.”

“A break above $1,877 is needed to ease fears of a top, but with a break above $1,917 needed to suggest we are seeing a more sustainable move higher, potentially back to the $2,075 record high.”

“The completion of a large base for 10yr US Real Yields, as well as a strengthening USD, is expected to exert downside pressure on gold and increase the risk for a top.”