Slightly Softer In Asia-Pac After Strengthening on Friday After US Wage & Price Data

Gold experienced a 0.3% decline during the Asia-Pacific trading session, following a 0.7% gain that brought it to $1959.49 on Friday. The market reacted to mixed US price data, which created uncertainty about the Federal Reserve's potential rate adjustments. There are speculations about whether the US economy is overheating or experiencing a slowdown.

• There was an immediate bid for US tsys after a lower-than-estimated gain in the Employment Cost Index (1.0% vs. 1.1% est). However, rates quickly reversed the gap move as markets deemed it an overreaction to near-in-line data. Core PCE printed in line at 4.1%, with core non-housing services, the Fed’s preferred indicator, easing a tenth to 0.22% m/m.
• China also said it will announce new measures to boost consumption, which could boost gold purchases from one of the world’s biggest importers.
• The strong climb in bullion came against a background of modest USD weakness. Nonetheless, it only reversed about half of Thursday’s post-US data slump. According to MNI’s technicals team, Thursday’s low of $1942.7 now forms initial support. Resistance remains at a bull trigger of $1987.5 (Jul 20 high).