Pullback From Record High Continues

Gold is slightly higher in today’s Asia-Pac session, after closing slightly lower at $2396.59 yesterday. The yellow metal hit an intra-day low of $2384.

• Bullion has now pulled back around 3.5% from its record high set last week.
• US yields ended Monday ~1bp higher after being ~2bps lower during the Asian session on the back of news that President Biden was pulling out of the election race.
• Lower rates are typically positive for gold, which doesn’t pay interest.
• It seems very likely that Kamala Harris will be the Presidential Nominee for the Democrats with the focus now turning to her running mate, betting markets have Josh Shapiro as the favourite with a 32% chance followed by Andy Beshaer at 26% and Roy Cooper at 20%.
• 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 trend condition in gold remains bullish, despite the fade off last-week highs, with initial resistance at $2,483.8, the July 17 high. Initial support is at $2,390.1, the 20-day EMA.