Higher On Stagflation Worry

Gold is ~$5/oz better off at $1,983/oz, back from fresh five-week highs made earlier in the session. The overall move higher comes as major crude benchmarks have extended a three-day streak of gains in Asia-Pac dealing, fuelling worry from some quarters re: stagflation despite a broad uptick in nominal U.S. Tsy yields and the USD (DXY).

• To recap, the precious metal closed ~$5/oz firmer in the previous week on the highest headline U.S. CPI print since 1981, although the lower-than-expected M/M increase in Mar core CPI likely helped cap gains as some have regarded it as a possible sign of inflationary pressures peaking.
• Elsewhere, hope surrounding a diplomatic resolution to the Russia-Ukraine conflict has likely evaporated, with Ukrainian leaders stating over the weekend that peace talks would end if Russian forces eliminate the remaining defenders of the city of Mariupol.
• Debate over a “de facto” EU ban on Russian gas has also done the rounds in Asia (re: the EU’s inability to pay in rubles due to sanctions), raising worry over the potential for elevated energy prices.
• Looking ahead, focus will turn to the Fed’s Bullard as he speaks on the U.S. economy and monetary policy later in the U.S. session (2000 GMT).
• From a technical perspective, the short-term outlook is bullish, following the recent move above $1,966.1/oz (Mar 24 high). Resistance is situated at $2,001.6/oz (61.8% retracement of Mar8-29 downleg), while immediate support is seen at around ~$1,942.6/oz, near the 20-Day EMA.