On Track For Third Weekly Gain

Gold is 0.1% higher in the Asia-Pac session, after closing 0.4% lower at $2036.41 on Thursday on the back of a firmer USD and higher US Treasury yields.

• Cash tsys finished 4-7bps cheaper, with the 10-year leading. The US tsy 10-year yield rose 7bps to 4.33% but is still down 65bps from the cycle high of 5.01%.
• Nevertheless, bullion is on track for a third weekly rise amid growing market expectations that the US Federal Reserve has achieved peak funds rate and that the next move will be a cut. This expectation was supported yesterday by the release of the core PCE inflation data, which printed in line with expectations, and continuing jobless claims data that rose more than expected.
• However, with around 100bps of easing priced in by the market, Fedspeak pushed back against the market's dovish policy outlook ahead of Fed Chair Powell’s fireside chat later today. Fed Daly said that she is not thinking about rate cuts, and it is too early to call an end to hikes. Fed Williams noted that monetary conditions are restrictive but should remain so for some time to bring inflation back to 2%.