Pressured By A Resurgent USD As US Yields Hit Fresh Cycle Highs

Gold is slightly lower in the Asia-Pac session, after closing -0.5% at $1915.92 on Monday. Bullion came under strong pressure from a resurgent US dollar, fueled by a large bear steepening in US Treasuries and a surge in real yields.

• US Treasury yields climbed to new cycle highs across most maturities, with the 10-year printing a high at 4.5457% before marginally paring gains. The 30-year yield reached its highest since 2011 (4.6698%). The recent climb in oil prices combined with the Fed’s higher-for-longer message from last week and concerns over the US fiscal deficit weighed on US Treasuries.
• There was little reaction to the latest round of US data as the Chicago Fed Act. Index and Dallas Fed Mfg Activity Index were both weaker than forecast. Chicago Fed President Goolsbee said US rates were at their peak and the debate would soon shift to how long they'll hold there.
• A US government shutdown would have negative implications for its credit assessment as it would highlight the weakness of US institutional and governance strength compared to its peers, Moody’s said.
• Support at $1901.1 (Sep 14 low) could start to be eyed as the yellow metal remains far below last week’s pre-FOMC high of $1947.5, according to MNI’s technicals team.