Firmer After Fitch Downgrades US Sovereign Credit Rating

Gold is up by 0.2% in the Asia-Pac session following Fitch Ratings' decision to downgrade the US sovereign credit rating. This move comes after the precious metal experienced a 1% decline on Tuesday due to the strength of the USD and higher US Treasury yields. The USD Index rose above the 100-day moving average for the first time since late June.

• The USD and US tsys looked through weaker than forecast US data; JOLTS Job Openings, ISM Mfg and Prices Paid all printing below expectations. There were no substantive headline drivers for the post-data reversal in rates, however. It appeared algos reacted too strongly to the data with prop and fast money selling into the move.
• Focus turns to ADP private employment data today (+188k est vs. 497k prior), and Non-Farm Payrolls on Friday (+200k job gains vs. +209k prior).
• Bullion briefly crossed support at $1942.7, last Thursday’s low. According to MNI’s technicals team, a sustained break opens the lowest levels in close to a month as well as the 50% retracement of the up leg off the June low at $1940.3.