Bounces On USD Weakness

Gold has spiked higher this afternoon, regaining the $1860 handle, around 0.35% above closing levels form last week.

• The early trend for gold was very benign. We spent the early part of the day oscillating around the $1850 level.
• This early tone was weighed down by firmer risk appetite as stronger equities for Asia Pac, and a further recovery in US equity futures, dampened flows into the safe haven asset.
• However, this turned around on the back of USD weakness. To be fair, the DXY is only down modestly (-0.10%) from closing levels at the end of last week. The tone in USD/Asia pairs has been much weaker though, led by the China currency (USD/CNH down -0.90% at the time of writing to 6.6600).
• Like last week, the bulls will be eyeing a test of $1865/$1870, while support should emerge between the $1845/$1850 level in the near term.