A Touch Softer On The Day, But Bulls Remain In Control From Technical Standpoint

The move away from session lows in the BBDXY and U.S. real yields helped spot gold off best levels through the London morning.

• Also note that some of the geopolitical risk premium that had built up was likely unwound given the apparent reduced risk of an imminent Israeli ground invasion of Gaza.
• That leaves spot trading $9/oz or so lower on the day at $1,964/oz, after printing as low as $1,954/oz, with some stabilisation evident over the last couple of hours.
• Technically, initial firm pivot support lies at $1,907.7/oz, the 50-day EMA. Clearance of this level is required to signal a short-term top and a potential reversal. Bulls remain in control until we see a break there, with upside interest initially focused on the Oct 20 high ($1,997.2/oz).
• Known ETF holdings of gold ticked away from cycle lows towards the end of last week, but Monday’s trade saw a modest fall in those holdings, per BBG data.
• Central bank flows have been much more supportive in recent times, as we have flagged previously.