GOLD: Steady Despite Speculation Of A 50bp Cut In September

Gold is broadly unchanged at $2,496/oz over the past 24 hours. 

• This occurred despite a sizeable rally in US Treasuries, as soft US job openings data rekindled speculation of a 50bp Fed cut two weeks from now.
• With Friday's crucial nonfarm payrolls report intensifying the focus on labour market indicators, the July JOLTS report saw job openings fall to 7.673m (cons 8.10m) in July after a downwardly revised 7.91m (initial 8.184m) in June.
• Adding to the dovish tone was a BoC rate cut (as expected) and a Fed Beige Book that highlighted softer economic activity alongside moderating inflation and employment.
• For the first time since mid-August, the US STIR market briefly showed around 50/50 implied probability of a 50bp cut in September - with 112bps of total cuts this year - though those extremes faded by a couple of basis points (last 36bps, i.e. 44% prob of 50bp Sept cut, and 110bps respectively).
• Lower rates are typically positive for gold, which doesn’t pay interest.
• According to MNI’s technicals team, the trend in gold remains bullish with a focus on $2,536.4 next, a Fibonacci projection. Initial support to watch lies at $2,485.4, the 20-day EMA, which has been pierced.