Just Off Post-GDP Highs; On Track For Higher Weekly Close

Gold sits ~$2/oz weaker, printing $1,754/oz at typing. The precious metal operates just shy of Thursday’s best levels ($1,757.1/oz), putting it on track to record a second straight week of gains (that comes after five consecutive weeks of losses prior).

• To recap, gold closed ~$20/oz higher on Thursday, a little below fresh three-week highs made after the U.S. Q2 advanced GDP print missed expectations (indicating a technical recession). The move higher was facilitated by a downtick in U.S. real yields, with the DXY nudging a little lower as well after failing to breach 107.00.
• Gold has rebounded from multi-month lows amidst the post-FOMC shift lower in expectations for a 75bp hike in the Fed’s Sep meeting (Sep FOMC dated OIS now price in ~56bp for tightening vs. ~62bp prior), with recent economic data misses providing support for that narrative as well. The yellow metal however remains firmly set for a fourth straight monthly decline, with progress in the Fed’s inflation fight remaining in focus, as Fed Chair Powell has emphasised “less clear” guidance and data-dependence for future FOMC decisions.
• From a technical perspective, gold has breached initial resistance at $1,745.4/oz (Jul 13 high), strengthening its near-term bullish set-up, and opening the possibility of a stronger bounce. The move higher has exposed further resistance at $1,787.0/oz (May 16 low, recent breakout level), with support seen at $1,711.7/oz (Jul 27 low).