Lower As Tsy Yields Push Higher, Oil Softens

Gold deals ~$4/oz softer to print $1,943/oz at writing, backing away from one-week highs made earlier in the session. The move lower was facilitated by nominal U.S. Tsy yields edging higher (with the U.S. Tsy 10-Year yield breaking past 2.75% for the first time since Mar ‘19), while inflationary worry from some quarters has eased as major crude benchmarks have come under pressure in Asian hours.

• To recap, the precious metal notched three straight days of gains to hit one-week highs on Friday, aided by broader U.S. real yields backing away from recent cycle highs during the session.
• A note that the correlation between the Dollar index (DXY) and gold has risen sharply, with the 3M correlation now crossing into positive territory. Some take this as a potential sign of market stress, suggesting demand for “safe havens” in both the USD and bullion amidst rising geopolitical risks.
• Looking ahead, Chicago Fed President Evans (‘23 voter) is scheduled to discuss the economy and monetary policy on Monday (1640 GMT), with Atlanta Fed Pres Bostic (‘24 voter) and Governors Bowman and Waller expected to deliver remarks at the Fed Listens event (1330 GMT). U.S. CPI is due on Tuesday (1230 GMT).
• From a technical perspective, gold remains range bound, with the outlook remaining bearish following the pullback from $2,070.4/oz (Mar 8 high). Initial support is situated around ~$1,909.8/oz (50-Day EMA), with further support at $1,890.2/oz (Mar 29 low and bear trigger). Resistance is seen at $1,966.1/oz (Mar 24 high).