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A Little Firmer In Asia; Third Straight Monthly Decline Eyed

GOLD

Gold is ~$3/oz firmer to print $1,821/oz at typing, a little below best levels, but operating comfortably within Wednesday’s range. The precious metal remains on track for a third consecutive monthly decline.

  • To recap Wednesday’s price action, gold whipped between two-week lows ($1,812/oz) to session highs ($1,833/oz) leading up to the release of U.S. Q1 GDP, ultimately closing ~$2/oz weaker amidst an uptick in U.S. real yields and the USD (DXY).
  • Fed Chair Powell on Wednesday nodded to the possibility of Fed-led economic slowdown, calling it “challenging” to hike rates “without a hit to growth” or employment. His remark that “the bigger mistake would be to fail to restore price stability" likely drew some focus, reiterating the Fed’s focus on aggressive hikes to control inflation despite recessionary worry from some quarters.
  • July FOMC dated OIS continue to price in ~70bp of tightening, pointing to an ~80% chance of a 75bp hike for that meeting, with a cumulative ~197bp priced in through calendar ‘22.
  • From a technical perspective, gold’s lows made on Wednesday sees it approach initial support at $1,805.2/oz (Jun 14 low), a break of which would expose further support at $1,787.0/oz (May 16 low and bear trigger).
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Gold is ~$3/oz firmer to print $1,821/oz at typing, a little below best levels, but operating comfortably within Wednesday’s range. The precious metal remains on track for a third consecutive monthly decline.

  • To recap Wednesday’s price action, gold whipped between two-week lows ($1,812/oz) to session highs ($1,833/oz) leading up to the release of U.S. Q1 GDP, ultimately closing ~$2/oz weaker amidst an uptick in U.S. real yields and the USD (DXY).
  • Fed Chair Powell on Wednesday nodded to the possibility of Fed-led economic slowdown, calling it “challenging” to hike rates “without a hit to growth” or employment. His remark that “the bigger mistake would be to fail to restore price stability" likely drew some focus, reiterating the Fed’s focus on aggressive hikes to control inflation despite recessionary worry from some quarters.
  • July FOMC dated OIS continue to price in ~70bp of tightening, pointing to an ~80% chance of a 75bp hike for that meeting, with a cumulative ~197bp priced in through calendar ‘22.
  • From a technical perspective, gold’s lows made on Wednesday sees it approach initial support at $1,805.2/oz (Jun 14 low), a break of which would expose further support at $1,787.0/oz (May 16 low and bear trigger).