Back to Early March Levels

Gold deals ~$10 softer to print $1,941/oz at writing, operating a touch above session lows, with U.S. real yields nudging a little higher in Asia-Pac hours.

• To recap, gold shed ~$40 on Monday to give up virtually all its gains for March, with the move lower facilitated by a surge in U.S. real yields (ahead of the FOMC this week). OIS markets show a shade over 25bp of tightening priced in for the upcoming Fed meeting, with a cumulative ~175bp of tightening now being priced in through calendar ‘22.
• While a fourth round of Russia-Ukraine talks (via video link) on Monday yielded no concrete results, both parties have taken a technical pause, and are due to reconvene later on Tuesday. A Sputnik (Russian state-owned news agency) report has also since quoted adviser to the Ukrainian President’s office Oleksiy Arestovych as saying that a peace agreement could be reached “no later than May, early May”.
• Commodities continue to back away from recent cycle highs, with the BBG Commodity Index currently printing ~13% below its peak lodged on Mar 8.
• From a technical perspective, pullbacks are still seen as corrective and allowing for overbought conditions to unwind, with bullion remaining above key short-term support at $1,878.4/oz (Feb 24 low). Gold has tested more immediate support at ~$1,939.7/oz (20-Day EMA), and a break of that level will expose further support at $1,901.5 (Mar 1 low). On the other hand, resistance is situated at $2,009.2/oz (Mar 10 high).