Edging Away From Tuesday’s Peak

The yellow metal has ticked away from Tuesday’s highs in Asia-Pac trade, last dealing a little over $5/oz softer on the day, printing just above $1,770/oz.

• A reminder that Tuesday’s session high was a product of softer than expected U.S. PPI data, with a re-test coming on the back of news of a missile falling in Polish territory (which killed two Polish civilians).
• An Asia-Pac rally in the greenback, which has seen the broader DXY pare the bulk of Tuesday’s losses, alongside a light uptick in U.S. Tsy yields, after western powers chose not to lay the blame re: the Polish missile situation at the feet of the Russians (U.S. President Biden suggested that it was “unlikely” that the missile was launched from Russia), has weighed on gold overnight.
• Fedspeak & policy trajectory, as well as U.S. inflation dynamics, continue to present the most meaningful fundamental inputs for gold in the immediate term.
• Technically, last week’s gains resulted in the break of a number of important resistance points. The yellow metal has cleared the Oct 4 high ($1729.50/oz). This strengthens the current bullish theme and paves the way for an extension towards $1800/oz, with key resistance located above that particular round number resistance in the form of the Aug 10 high ($1807.90/oz). On the downside, initial firm support is seen at the Nov 9 low ($1,702.30/oz).