Little Changed In Asia; $1,800/oz Eyed

Gold deals~$2/oz weaker to print ~$1,789/oz at typing, backing away from its earlier bid as an initial downtick in nominal U.S. Tsy yields has reversed course. The precious metal however remains on track for a third straight higher weekly close as the USD (DXY) has extended a pullback away from cycle highs, with rising geopolitical and recession-related worry providing support for the space as well.

• To recap Thursday’s price action, gold closed ~$26 higher, facilitated by a downtick in the DXY, while wider worry re: economic slowdowns were bumped higher as the BoE forecast that the UK will potentially enter a recession in Q4 ‘22 that may last for over a year, after unveiling its largest rate hike in 27 years.
• Elsewhere, the commencement of Chinese live-fire drills in the waters surrounding Taiwan (with Japan accusing China of firing missiles over Taiwanese territory and into its own EEZ) has contributed to some haven demand, with condemnation from the likes of the U.S. and Japan kicking geopolitical tensions higher a notch (note that China on Thursday cancelled a planned bilateral meeting of foreign ministers with Japan over the G7’s joint statement re: Taiwan).
• From a technical perspective, gold is through initial resistance at the $1,783.1/oz (50-Day EMA), with the relatively clear break higher suggesting potential for a bullish extension, exposing further resistance at $1,804.6/oz (trendline resistance).