Lower In Asia; Haven Demand Provides Some Support

Gold is ~$6/oz worse off to print $1,952/oz at writing, operating below Wednesday’s best levels amidst an uptick in nominal U.S. Tsy yields.

• To recap, the precious metal rose from one-week lows on Wednesday to close at session highs ~$8/oz firmer, aided by U.S. real yields broadly backing away from recent highs, with U.S. 10-Year real yields closing below neutral levels after a brief sojourn into positive territory for the first time since early ‘20.
• Gold has operated clear above its March troughs despite a nearly one-way surge in U.S. real yields over the same period, likely finding some support from rising demand for havens. Concern over geopolitical risks (i.e. the Russia-Ukraine conflict) and the ability of central banks to control inflation without crimping economic growth remains elevated, particularly after global economic growth downgrades by the World Bank and the International Monetary Fund (IMF) earlier this week.
• Known ETF holdings of gold continue to record fresh highs for ‘22, suggesting strong demand for the yellow metal (although the metric remains below its previous peak in Oct ‘20).
• From a technical perspective, a bearish reversal is on the cards for gold following its pullback from recent highs. Initial support is seen around ~$1,925.2/oz, (50-Day EMA), while resistance is some distance away at $1,998.4/oz (Apr 18 high and bull trigger).