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Lower In Asia; $1,800/oz In The Balance

GOLD

Gold sits ~$6/oz weaker to print $1,796/oz, backing away from last Friday’s late session highs ($1,802.8/oz) at typing amidst an uptick in the USD (DXY) on the PBOC’s MLF and reverse repo rate cut, as well as the broad miss in Chinese activity indicators.

  • To recap, gold added ~$13/oz on Friday to close above $1,800/oz for the first time in over three months, capping a fourth straight week of gains. The move higher in gold came despite an uptick in the DXY, as the latter ultimately ended the week lower for a third week in four, extending a pullback from cycle highs observed in mid-July.
  • Sep FOMC dated OIS now price in ~62bp of tightening for that meeting from ~60bp prior to Fedspeak from Richmond Fed Pres Barkin (‘24 voter) on Friday (fleshed out elsewhere), pointing to nearly even odds for a 50bp vs. a 75bp hike. Looking ahead, focus will turn to minutes of the Fed’s July meeting, due to be released on Wednesday.
  • Elsewhere, total known ETF holdings of gold continue to trend lower, hitting its lowest level in over five months on Friday despite the recovery in the price of gold from lows witnessed in June.
  • From a technical perspective, previously-flagged technical levels remain in play for gold. Initial resistance is located at $1,807.9/oz (Aug 10 high and the bull trigger), while support is seen at $1,754.4 (Aug 3 low, key short-term support).
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Gold sits ~$6/oz weaker to print $1,796/oz, backing away from last Friday’s late session highs ($1,802.8/oz) at typing amidst an uptick in the USD (DXY) on the PBOC’s MLF and reverse repo rate cut, as well as the broad miss in Chinese activity indicators.

  • To recap, gold added ~$13/oz on Friday to close above $1,800/oz for the first time in over three months, capping a fourth straight week of gains. The move higher in gold came despite an uptick in the DXY, as the latter ultimately ended the week lower for a third week in four, extending a pullback from cycle highs observed in mid-July.
  • Sep FOMC dated OIS now price in ~62bp of tightening for that meeting from ~60bp prior to Fedspeak from Richmond Fed Pres Barkin (‘24 voter) on Friday (fleshed out elsewhere), pointing to nearly even odds for a 50bp vs. a 75bp hike. Looking ahead, focus will turn to minutes of the Fed’s July meeting, due to be released on Wednesday.
  • Elsewhere, total known ETF holdings of gold continue to trend lower, hitting its lowest level in over five months on Friday despite the recovery in the price of gold from lows witnessed in June.
  • From a technical perspective, previously-flagged technical levels remain in play for gold. Initial resistance is located at $1,807.9/oz (Aug 10 high and the bull trigger), while support is seen at $1,754.4 (Aug 3 low, key short-term support).