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Flat In Asia; May FOMC Eyed


Gold deals ~$1/oz softer, printing $1,977/oz at writing. The precious metal operates near the bottom of Monday’s range as the USD (DXY) has hit another fresh two-year high, keeping within a tight ~$4 band in fairly limited Asia-Pac dealing.

  • To recap Monday’s price action, bullion surrendered gains after hitting fresh five-week highs at $1,998.4/oz, backing away from best levels as nominal U.S. 10-Year Tsy yields and the USD (DXY) pushed higher in the NY session, with the latter hitting two-year highs in the process. Gold ultimately closed a shade above neutral levels for the day, bucking support from a broad downtick in U.S. real yields.
  • Up next, Chicago Fed President Evans (‘23 voter) is due to speak at 1605 GMT. Looking further out, focus will shift to Fed Chair Powell at an IMF event on Thursday (1700 GMT), in what will be his final public remarks before the pre-FOMC blackout period.
  • A note that May FOMC dated OIS now price in a little under 50bp of tightening for that meeting, largely in line with previous comments from Powell expressing support for such a move.
  • Looking to technical levels, the short-term outlook remains bullish. Resistance is situated at $1,998.4/oz (Apr 18 high) and $2,001.6/oz (61.8% retracement of Mar8-29 downleg), while immediate support is seen around ~$1,942.6/oz, near the 20-Day EMA.

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