Lower In Asia

Gold deals $4/oz softer to print $1,928/oz at typing, backing away from Monday’s best levels and operating just above session lows as the USD (DXY) continues to hover around one-week highs.

• To recap, the precious metal closed ~$6/oz firmer on Monday despite an uptick in the DXY, with the move higher coming as the west (particularly the EU) has highlighted that they are preparing more sanctions on Russia over alleged war crimes in Ukraine.
• To elaborate, the EU has said it would “significantly tighten” sanctions on Russia. While a full energy product ban still appears unlikely, participants may be watching for progress towards a partial embargo, with German Finance Minister Lindner proposing a more limited ban on Russian coal and oil as “gas cannot be substituted in the short term.”, echoing similar remarks made by French President Macron earlier on Monday.
• Elsewhere, OIS markets now price in a cumulative ~219bp of Fed tightening for the rest of calendar ‘22, with focus turning to Wednesday’s FOMC minutes (1800 GMT).
• From a technical perspective, previously defined resistance levels continue to hold for bullion. Support is located at $1,890.2/oz (Mar 29 low), while resistance is seen at $1,966.1/oz (Mar 24 high).