Rebounds From Early Dip

Gold has recovered from an early session dip to be back at $1855. This is modestly higher on NY closing levels and we remain well within recent ranges.

• The precious metal is tracking USD developments more closely in the near term rather than US yield moves.
• US yields were higher overnight and are firming again today, but gold has been supported on dips. To be sure, yields elsewhere are trending higher as well, so this is diminishing the upside USD impetus (with USD/JPY being the obvious exception).
• Today's weaker equity sentiment in the region has probably aided Gold to a degree, but it doesn't appear to be a major driver. The OECD painted a bleak picture for the global economic outlook overnight, but this was very much in line with what the World Bank stated in the previous evening.
• Cross asset signals will be watched closely over the next few sessions, with the ECB decision tonight, followed by tomorrow's US CPI print.
• In terms of levels, on the topside, we haven't managed to crack above $1860 this week, while support is evident sub $1845.