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GOLD: Rebound After Another Heavy Session On Tuesday

GOLD
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Spot gold fell by another 0.8% to $2,598.39/oz on Tuesday, as higher US yields and pressure on major equity indices prompted further gains for the US dollar.

  • However, bullion has recovered some of the lost ground in today’s Asia-Pac session, up 0.5%.
  • It was a heavy session for US Treasuries on Tuesday in the lead-up to today’s key October CPI inflation data. It will be followed by PPI on Thursday.
  • The US 10-year cheapened 12bps to 4.43% and the 2-year yield rose 9bps to 4.34%. Concerns over potentially inflationary aspects of Trump's fiscal policies likely exacerbated selling.
  • Minneapolis Fed President Kashkari suggested on Tuesday that it could take significant upside inflation surprises in the next two months to cause the Fed to deviate from cutting rates a third consecutive time at the next meeting.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, yesterday’s move brought the yellow metal below the $2,600 level earlier for the first time since September 20, down more than 5% since last week’s US election.
  • The latest pullback appears to be corrective, although recent weakness has resulted in a breach of the 50-day EMA, signalling scope for a deeper retracement towards $2,547.0, the Sep 18 low.
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Spot gold fell by another 0.8% to $2,598.39/oz on Tuesday, as higher US yields and pressure on major equity indices prompted further gains for the US dollar.

  • However, bullion has recovered some of the lost ground in today’s Asia-Pac session, up 0.5%.
  • It was a heavy session for US Treasuries on Tuesday in the lead-up to today’s key October CPI inflation data. It will be followed by PPI on Thursday.
  • The US 10-year cheapened 12bps to 4.43% and the 2-year yield rose 9bps to 4.34%. Concerns over potentially inflationary aspects of Trump's fiscal policies likely exacerbated selling.
  • Minneapolis Fed President Kashkari suggested on Tuesday that it could take significant upside inflation surprises in the next two months to cause the Fed to deviate from cutting rates a third consecutive time at the next meeting.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, yesterday’s move brought the yellow metal below the $2,600 level earlier for the first time since September 20, down more than 5% since last week’s US election.
  • The latest pullback appears to be corrective, although recent weakness has resulted in a breach of the 50-day EMA, signalling scope for a deeper retracement towards $2,547.0, the Sep 18 low.