Little Changed In Asia

Gold is virtually unchanged at typing, printing ~$1,921.7/oz after trading on either side of neutral levels during Asia-Pac dealing. The precious metal is off Monday’s low but has prolonged a pullback from cycle highs made in early March ($2,070.4/oz Mar 8 high), with focus turning to Fed messaging re: the potential/likelihood for > 25bp rate hikes at the upcoming FOMC meetings.

• To recap Tuesday’s price action, the precious metal pared losses from worst levels in the NY session ($1,910.9/oz) to close ~$15 lower, with the overall decline facilitated by an uptick in U.S. real yields.
• May FOMC dated OIS now prices in ~48bp of tightening, pointing to a >90% chance of a 50bp rate hike at that meeting. The move higher comes after Fed Chair Powell’s hawkish comments earlier in the week, with subsequent Fedspeak showing little to no pushback against the idea of 50bp rate rate hikes at some point in ‘22.
• Worry re: the Russia-Ukraine conflict has provided some support ahead of the $1,900/oz psychological level. To elaborate, ongoing ceasefire negotiations continue to yield little in the way of concrete developments, with both sides showing no real sign of conceding when it comes to their well-documented conditions for a peace deal.
• From a technical perspective, short-term conditions remain bearish for bullion, although it continues to operate within previously defined technical levels. Support is seen at $1,895.3/oz (Mar 15 low), while resistance is situated at $1,954.7 (Mar 15 high).