Headed For Pre-FOMC Range As Dollar, Nominal Tsy Yields Surge

Gold sits ~$5/oz lower, printing $1,872/oz at typing. The move lower extends Thursday’s losses and sees the precious metal give up virtually all post-FOMC gains, with the weakness facilitated by an uptick in nominal U.S. Tsy yields and the USD (DXY) during the session.

• To recap, gold closed ~$11/oz lower on Thursday as U.S. real yields and the USD (DXY) broadly surged to/above pre-FOMC levels, facilitating a sharp decline in the NY session after hitting one-week highs at $1,909.8/oz.
• Zooming out, the yellow metal trades in a range just above 11-week lows made earlier this week, with the geopolitical risk premium re: the Russia-Ukraine conflict almost entirely countered by evident worry re: rising rates and Dollar strength.
• Looking ahead, U.S. labour data (NFPs, AHE, Hours Worked etc.) crosses later on Friday at 1230 GMT. A note that this comes after the ADP employment data miss and ISM Services employment sub-component decline earlier in the week, while also keeping in mind debate re: the long-term correlation between ADP and NFP data.
• From a technical perspective, resistance for bullion is situated around $1,913.9.oz (20-Day EMA), while support is eyed at $1,850.5/oz (May 3 low).