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GOLD: Little Changed But Still ~3.5% Below Monday’s High

GOLD

Gold is slightly weaker in today’s Asia-Pac session, after closing little changed at $2636.02 on Wednesday, ahead of the US Thanksgiving Holiday. Nevertheless, the yellow metal remains around 3% below Monday’s high.

  • Yesterday’s US data deluge was mixed but ultimately quite close to consensus. Still, it offered a reminder that core PCE inflation remains on track to overshoot median FOMC projections for Q4, while super core PCE inflation has stabilised at rates still uncomfortably above the 2% target.
  • Fed Funds implied rates were little changed yesterday. Cumulative cuts from 4.58% effective: 16bp Dec, 22bp Jan, 35bp Mar and 52bp June.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, Monday’s move lower is - for now - considered corrective, despite it being a very sharp pullback. Resistance to watch is $2,721.4, Monday’s high, while key support to monitor is $2,536.9, the Nov 14 low.
  • Silver underperformed yesterday, around 1.5% lower. As a result, the gold-silver ratio has risen to its highest level since Sept 12. The corrective cycle in silver that started on Oct 23 remains in play, with focus on $28.446, a Fibonacci retracement.
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Gold is slightly weaker in today’s Asia-Pac session, after closing little changed at $2636.02 on Wednesday, ahead of the US Thanksgiving Holiday. Nevertheless, the yellow metal remains around 3% below Monday’s high.

  • Yesterday’s US data deluge was mixed but ultimately quite close to consensus. Still, it offered a reminder that core PCE inflation remains on track to overshoot median FOMC projections for Q4, while super core PCE inflation has stabilised at rates still uncomfortably above the 2% target.
  • Fed Funds implied rates were little changed yesterday. Cumulative cuts from 4.58% effective: 16bp Dec, 22bp Jan, 35bp Mar and 52bp June.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, Monday’s move lower is - for now - considered corrective, despite it being a very sharp pullback. Resistance to watch is $2,721.4, Monday’s high, while key support to monitor is $2,536.9, the Nov 14 low.
  • Silver underperformed yesterday, around 1.5% lower. As a result, the gold-silver ratio has risen to its highest level since Sept 12. The corrective cycle in silver that started on Oct 23 remains in play, with focus on $28.446, a Fibonacci retracement.