Free Trial

Little Changed In Asia; Some Reprieve As Dollar Rally Pauses

GOLD

Gold deals ~$2/oz softer to print ~$1,746/oz in fairly limited Asia-Pac dealing, holding on to the bulk of Tuesday’s gains at writing.

  • To recap, gold closed ~$12 firmer on Tuesday amidst a downtick in the USD (DXY) and U.S. real yields, snapping a six-day streak of lower daily closes as participants reacted to weak U.S. economic data prints (flash PMIs, new home sales, and the Richmond Fed m’fing index).
  • Sep FOMC dated OIS currently price in ~63bp of tightening at that meeting (pointing to approx. even odds of a 50bp vs a 75bp hike at the meeting), a little below levels observed prior to Tuesday’s U.S. data prints.
  • Comments from Minneapolis Fed Pres Kashkari (‘23 voter) provided little fresh insight against recent Fedspeak, emphasising the need to fight inflation, stating that the Fed would only relax rate hikes should “compelling evidence” point to inflation “well on its way back down to 2%”.
  • From a technical perspective, conditions for gold remain bearish following its recent failure to break its trendline resistance. Initial support is seen at $1,727.8/oz (Aug 22 low), while initial resistance stands at ~$1,764.9/oz (20-Day EMA).

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.