A Little Firmer

The move lower in the USD (largely PBoC RRR-induced) and recovery from yesterday’s highs in U.S. Tsy yields allows bullion to firm back towards yesterday’s best levels, with spot last a handful of dollars higher at $2,034/oz. Some desks have also flagged central bank demand, which was a key driver of last year’s rally from a flow perspective. Meanwhile, known ETF holdings of gold have moved to a fresh multi-year low, per BBG data.

• For bulls, clearance of the Jan 12 high ($2,062.3/oz), is required to signal a reversal of the recent bearish pressure. This would expose the Dec 28 high ($2,088.5/oz). Zooming out, last week’s print below the 50-day EMA and the break of support at the Jan 11 low ($2,013.4/oz) has strengthened the bearish threat and a resumption of weakness would open a key level at the Dec 13 low ($1973.2/oz).