Lower In Asia; Powell MonPol Comments Eyed

Gold sits ~$6/oz weaker to print $1,827/oz at typing, operating below Tuesday’s worst levels, and taking it to one-week lows in the process. The move lower comes amidst a fresh bid in the USD (DXY), seeing the latter rising above Tuesday’s best levels in Asia-Pac dealing.

• To recap, the precious metal closed ~$6/oz lower on Tuesday despite limited downticks in U.S. real yields and the USD (DXY). Debate re: the possibility of a Fed-led recession has continued to do the rounds, possibly lending support to bullion, with Richmond Fed Pres Barkin being the latest on Tuesday to voice support for a possible 75bp rate hike in July.
• July FOMC dated OIS continue to squarely price in 75bp of tightening for that meeting, with a cumulative ~193bp of tightening priced in for calendar ‘22 - a decline from earlier in the week (as high as >210bp).
• Looking ahead, focus will be turn to Fed Chair Powell’s comments re: monetary policy to the Senate Banking Committee (1430 BST), where he is expected to provide details on the Fed’s ongoing inflation fight and the corresponding recessionary risks.
• From a technical perspective, previously outlined support and resistance levels remain intact at $1,787.0/oz (May 16 low) and $1,889.1/oz (trendline resistance from Mar 8 high) respectively.