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Lower In Asia; Facing Headwinds Above $1,850/oz

GOLD

Gold is ~$5/oz weaker to print $1,850/oz at typing, back from worst levels earlier in the session, and continuing to operate within a ~$30/oz trading range observed over the past week.

  • The largest moves in gold came on the cash open of US Tsys after the long weekend, seeing bullion dive to session lows amidst a rise in the USD (DXY) and nominal U.S. Tsy yields, with nominal U.S. 10-Year Tsy yields rising ~9bp to 2.83% at typing. The move in the latter was possibly facilitated by previously flagged remarks on Monday by the Fed’s Waller, emphasising the need for “several” 50bp rate hikes until inflation is brought down to the 2% target. A note that this comes after U.S. Personal Consumption Expenditure (PCE) data last Friday came in at +6.3% Y/Y. Looking elsewhere, gold registered little reaction to better-than-expected Chinese PMIs.
  • To recap Monday’s price action, the precious metal closed a little higher, with a downtick in the USD (DXY) to five-week lows providing little by way of an observable bullish impetus.
  • From a technical perspective, a corrective cycle remains in play for gold despite recent highs. A recent break of resistance at the 20-Day EMA suggests a potential test of the 50-Day EMA (~$1,882.0/oz), although gains are still considered corrective, with a downward primary trend direction observed by our technical analyst. Immediate support is seen at $1,807.5/oz (May 18 low).
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Gold is ~$5/oz weaker to print $1,850/oz at typing, back from worst levels earlier in the session, and continuing to operate within a ~$30/oz trading range observed over the past week.

  • The largest moves in gold came on the cash open of US Tsys after the long weekend, seeing bullion dive to session lows amidst a rise in the USD (DXY) and nominal U.S. Tsy yields, with nominal U.S. 10-Year Tsy yields rising ~9bp to 2.83% at typing. The move in the latter was possibly facilitated by previously flagged remarks on Monday by the Fed’s Waller, emphasising the need for “several” 50bp rate hikes until inflation is brought down to the 2% target. A note that this comes after U.S. Personal Consumption Expenditure (PCE) data last Friday came in at +6.3% Y/Y. Looking elsewhere, gold registered little reaction to better-than-expected Chinese PMIs.
  • To recap Monday’s price action, the precious metal closed a little higher, with a downtick in the USD (DXY) to five-week lows providing little by way of an observable bullish impetus.
  • From a technical perspective, a corrective cycle remains in play for gold despite recent highs. A recent break of resistance at the 20-Day EMA suggests a potential test of the 50-Day EMA (~$1,882.0/oz), although gains are still considered corrective, with a downward primary trend direction observed by our technical analyst. Immediate support is seen at $1,807.5/oz (May 18 low).