Prices Ease As CS Reassures Markets & US Yields Rise

Gold prices rose 0.8% on Wednesday and reached a high of $1937.39/oz on the back of further flight to quality flows driven by banking troubles extending across the Atlantic to Europe. During APAC trading they are down slightly and are currently trading around $1913.70. Bullion had reached a high of $1924.38 in early trading but then fell to a low of $1907.62 following a Credit Suisse report that reassured markets that it was strengthening its liquidity position. US 2-year yields rose in response which weighed on gold. The USD index is currently down slightly.

• Bullion remains above its 50-day simple moving average. On Wednesday it cleared resistance of $1923.20 but has been unable to hold above that today.
• Weaker-than-expected US PPI data supported gold as it tempered inflation concerns. The OIS market now has about 15bp of tightening priced in for the March 22 Fed meeting. Bullion is expected to rally above $2000/oz if the Fed pivots (bbg).
• The ECB meets later and is expected to hike rates by 50bp but the OIS market currently has about 29bp priced in. In the US, there is only second-tier data including February housing starts/permits, trade prices, jobless claims and the Philly Fed index.