A Little Lower In Asia; Clinging To Post-ECB Gains

Gold deals ~$3/oz weaker to print ~$1,716/oz at typing, operating within a fairly limited ~$4/oz range since the re-open. The precious metal has edged away from Thursday’s best levels amidst an uptick in nominal U.S. Tsy yields, but holds on to the bulk of its post-ECB gains.

• To recap, gold closed ~$20/oz higher on Thursday, having reversed losses from fresh 15-month lows ($1,680.99/oz) made earlier in the session. The rebound was facilitated by the ECB’s larger-than-expected 50bp rate hike, with the USD (DXY) whipsawing between session highs and lows before closing lower on the day. Elsewhere, recession-related worry resurfaced as well, aiding some haven demand amidst the previously-flagged miss in Philly Fed expectations and weekly jobless claims coming in at eight-month highs.
• The move higher in gold on Thursday ultimately failed to breach highs witnessed earlier in the week ($1,723.9/oz, Jul 18 high), with debate continuing to focus on bullion’s vulnerability amidst recent Dollar strength, aggressive Fed expectations, and technical weakness.
• From a technical perspective, gold remains in a downtrend, with moving average studies continuing to point to bearish conditions. The yellow metal has successfully tested support $1,680.5/oz (1.764 proj of the Mar8-29-Apr18 price swing), and sits at a comparable distance to initial resistance at $1,745.4/oz (Jul 13 high).