Coiling Into U.S. CPI

Asia-Pac trade has seen spot gold stick within the confines of the narrow range established over the last couple of sessions, last dealing little changed, just below $1,670/oz.

• The broader USD remains within touching distance of cycle highs, with our weighted U.S. real yield monitor exhibiting a similar dynamic.
• The impending U.S. CPI print presents the next major macro risk event and will cross early in the NY morning.
• Market participants are assessing the potential terminal rate of the current Fed hiking cycle (last priced at ~4.65%, per dated OIS) , with the swift monetary tightening deployed YtD more than offsetting well-documented geopolitical worries, leaving gold ~19% off its YtD high, or the best part of 9% lower YtD.
• The initial technical support and resistance lines are well defined. The 3 Oct low ($1,659.7/oz) protects key support at the YtD base ($1,615.0/oz). Meanwhile, initial resistance is seen at the Oct 4 high ($1,729.5/oz)