Medium Trend Remains Up

Gold is 0.3% higher in today’s Asia-Pac session, after closing 0.5% higher at $2409.64 on Tuesday.

• It was an uneventful summer trading session yesterday, with little newsflow to drive markets. US Treasuries finished with yields slightly lower but off their earlier lows. Lower rates are typically positive for gold, which doesn’t pay interest.
• The front end outperformed after cooler existing home sales. US existing home sales were weaker than expected, down 5.4% m/m in June, the fourth successive monthly decline.
• The market is now waiting for Friday’s update on the Fed’s preferred underlying inflation measure, which is expected to show the PCE deflator retreated to an annual pace of 2.5% from 2.6% in the year to May.
• According to MNI’s technicals team, the medium-term trend for gold still points higher despite the pullback across the second half of last week and on Monday.
• The previous breach of key resistance at $2,450.1, the May 20 high, opens the $2,500.00 handle next. Initial support is at $2,391.7, the 20-day EMA.