Holding Steady In Asia; Hugging $1,840/oz Ahead Of Week’s Fedspeak

Gold sits $3/oz better off to print $1,842/oz, trading comfortably within Monday’s range at typing in fairly limited Asia-Pac dealing.

• The precious metal has struggled to make headway above $1,850/oz in recent sessions, with the USD (DXY) remaining range bound a little below recently-made, multi-decade highs, and U.S. real yields continuing to operate around elevated levels as well.
• Earlier remarks from St. Louis Fed Pres Bullard highlighted that the Fed must meet market expectations for rate hikes as part of the process to rein in inflation, noting that July FOMC dated OIS currently price in a ~100% chance of a 75bp hike in that meeting (up from ~80% on Friday), with 205bp now priced in for the remaining four meetings of calendar ‘22.
• Debate re: a Fed-induced recession has likely continued to provide support for bullion despite the prospect of higher rates, with ex-Treasury Secretary Larry Summers on Monday repeating calls for Volcker-style monetary tightening to combat “secular stagflation”.
• Looking ahead, apart from previously-highlighted Fedspeak from the Fed’s Barkin (‘24 voter) and Mester (‘22 voter) later on Tuesday, Fed Chair Powell is due to testify before the Senate Banking Committee on Wednesday, where he is expected to touch on inflation.
• From a technical perspective, gold remains vulnerable in the wake of the steep sell-off seen on Jun 13. Previously flagged support and resistance levels remain intact, at $1,787.0/oz (May 16 low) and $1,889.1/oz (trendline resistance from Mar 8 high) respectively.