Under Pressure In Asia; One-Month Low Remains In Sight

Gold trades ~$7/oz lower to print $1,898/oz at typing, operating a touch above Tuesday’s lows as nominal U.S. Tsy yields have rebounded in Asia-Pac dealing, while the USD (DXY) remains bid near two-year highs.

• To recap, the precious metal closed ~$8/oz higher on Tuesday to extend a move off of Monday’s one-month lows, aided by a broad downtick in U.S. real yields.
• Steadily rising tensions (and hints of rhetoric re: nuclear war) surrounding the Russia-Ukraine conflict continues to lend support to bullion, with the week-to-date seeing escalations in the scale and breadth of western arms supplies to Ukraine, as well as the EU’s progress towards energy sanctions.
• Looking to energy issues within Europe, Russia is set to cut natural gas supplies to Poland and Bulgaria on Wednesday, with some debate noted re: the ability of the latter to cope with the halt in Russian gas imports. Elsewhere, German Economy Minister Habeck has highlighted the possibility of replacing Russian crude “in days”, noting that the country has come “very, very close” to such a goal.
• From a technical perspective, the pullback from recent highs at $1,998.4/oz (Apr 18 high) continues to represent a bearish threat. Gold continues to hold key support at $1,890.2/oz (Mar 29 low and bear trigger) for now, and a break below that would open up further support at $1,878.4/oz (Feb 24 low).