Slightly Weaker In Asia After First Weekly Decline In Three Weeks

Gold is slightly weaker during the Asia-Pacific session, following its first weekly decline in three weeks. The subdued prices can be attributed to the anticipation of further monetary tightening and a decrease in safe-haven demand.

• Last week, bullion experienced a 0.2% decrease, reflecting indications that both the US Fed and the ECB are likely to continue raising interest rates. This trend negatively affects gold, which does not offer interest-bearing returns.
• Haven assets like gold are facing challenges in gaining momentum, as market sentiment leans towards risk-taking. This sentiment has been strengthened recently by positive indications of improving Sino-US relations and optimism surrounding China's potential implementation of additional stimulus measures to support its sluggish recovery.
• According to MNI technicals team, the bear cycle in gold remains intact. The yellow metal is trading below trendline support drawn from the Nov 3 2022 low - the trendline intersects at $1966.8. The break of this line reinforces bearish conditions and marks a resumption of the downtrend. The focus is on $1903.5, 61.8% of the Feb 28 - May 4 bull cycle. Initial firm resistance is $1985.3, the May 24 high. Clearance of this resistance would signal a short-term reversal instead.