Gold shines in Asia as equities melt

• Risk aversion seems to have put a bid under gold.
• 10-year treasury yield drops below 2.7 percent.

The risk-off tone in the equities is boding well for the safe haven yellow metal.

Currently, gold (XAU/USD) is up 0.80 percent at $1347 levels, having hit a high of $1348.10 and low of $1338.70.

Asian equities are feeling the heat of the 1000-point drop in the Dow index. Further, the risk aversion in Asia is feeding back into the US equities. Thus, S&P 500 futures are down at least 1.5 percent. The negative feedback loop is forcing investors to take shelter under the safe haven assets like gold and treasuries.

The 10-year US Treasury yield has dropped more than 5 basis points in Asia and was last seen at 2.68 percent.

Looking ahead - the yellow metal could remain well bid as European equities will, likely, track the Asian indices lower.

Gold Technical Levels

A break above $1354.30 (Feb. 1 high) would open doors for $1366.80 (Jan. 24 high) and $1370.50 (Jan. 25 high). On the downside, a move below $1338.70 (session low) could yield a deeper pullback to $1324.10 (Jan. 18 low) and $1308.90 (Jan. 10 low).