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A Little Higher In Asia; $1,700/oz Remains In View

GOLD

Gold deals $4/oz firmer, printing $1,714/oz at typing. The precious metal deals a little below session highs made after the release of Chinese data, with a miss in Q2 GDP weighing against largely in-line expectations for industrial production and retail sales. Recent Dollar strength however remains in focus for bullion, which is on track for a fifth straight weekly loss.

  • To recap Thursday’s price action, the precious metal hit fresh 11-month lows ($1,697.7/oz) before paring losses to close ~$25 weaker. The decline was facilitated by an uptick in the USD, with the DXY briefly hitting fresh cycle highs above the 109.00 handle, sending the broader commodity space lower as well (silver hit a two-year low on Thursday, while platinum hit a 22-month low).
  • Gold’s weakness comes despite a limited unwinding of expectations for a 100bp Fed rate hike in July, with FOMC dated OIS pointing to ~82 bp of tightening priced in for that meeting (down from ~92bp on Thursday) after comments from the Fed’s Waller and Bullard supporting a 75bp move.
  • From a technical perspective, gold remains in a downtrend. The move lower on Thursday has broken initial support at $1,706.8/oz (1.618 proj of the Mar 8-29-Apr18 price swing), exposing further support at $1,690.6/oz (Aug 9 ‘21 low). On the other hand, resistance remains situated at $1752.3/oz (Jul 8 high).
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Gold deals $4/oz firmer, printing $1,714/oz at typing. The precious metal deals a little below session highs made after the release of Chinese data, with a miss in Q2 GDP weighing against largely in-line expectations for industrial production and retail sales. Recent Dollar strength however remains in focus for bullion, which is on track for a fifth straight weekly loss.

  • To recap Thursday’s price action, the precious metal hit fresh 11-month lows ($1,697.7/oz) before paring losses to close ~$25 weaker. The decline was facilitated by an uptick in the USD, with the DXY briefly hitting fresh cycle highs above the 109.00 handle, sending the broader commodity space lower as well (silver hit a two-year low on Thursday, while platinum hit a 22-month low).
  • Gold’s weakness comes despite a limited unwinding of expectations for a 100bp Fed rate hike in July, with FOMC dated OIS pointing to ~82 bp of tightening priced in for that meeting (down from ~92bp on Thursday) after comments from the Fed’s Waller and Bullard supporting a 75bp move.
  • From a technical perspective, gold remains in a downtrend. The move lower on Thursday has broken initial support at $1,706.8/oz (1.618 proj of the Mar 8-29-Apr18 price swing), exposing further support at $1,690.6/oz (Aug 9 ‘21 low). On the other hand, resistance remains situated at $1752.3/oz (Jul 8 high).