DXY Caps Gold, ETFs Not Participating In Latest Rally

Spot gold trades a handful of dollars higher at $1,868/oz at typing. A fresh YtD high for the DXY capped gold on Monday. Our weighted U.S. real yield monitor was ultimately little changed come the close, although underlying worry re: inflation continues to support bullion. Resistance remains intact at the June 14 high ($1,877.7/oz). A break there would expose the June 8 high ($1,903.8/oz). Initial support is seen at the Nov 10 low ($1,822.4/oz).

• It is interesting to note that ETF holdings of gold are essentially unchanged in net terms over the last 6 sessions, after hitting the lowest level witnessed since mid-May '20 in the middle of last week. Still, the rebound from the trough in that metric hasn't been steep. On net, the dynamic in known ETF holdings of gold points to a lack of participation in the latest leg of the gold rally on the part of ETFs, with a steady weekly net liquidation of ETF holdings of gold seen up until last week.