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Steady After Being Pressured By Yields & Improving Risk Appetite On Monday


Gold is little changed in the Asia-Pac session, after closing 0.5% lower at $1996.10 on Monday. Bullion was pressured by higher US yields and improving risk appetite.

  • US Treasuries were pressured through the NY session, with yields finishing 3-6bps higher on supply concerns and an improvement in risk appetite.
  • The US Treasury expects to borrow $776bn in Q4 and an additional $816bn in Q1 2024. Both estimates would represent records for each respective quarter. However, the Q4 estimate was $76bn less than previously announced in July, due to projections of higher receipts.
  • Nikkei headlines that posited the BOJ will consider tweaking the yield curve control framework at today’s policy meeting extended the selloff in US Treasuries on beliefs higher JGB rates could pull demand from US Treasuries.
  • Risk appetite began the week on a positive note, with the market taking a sanguine view of indications that Israel was taking a less expansive approach to the invasion of Gaza. Wall Street finished up greater than 1%, while oil dropped ~4%.
  • From a technical standpoint, gold remains far above support at $1937.6 (20-day EMA) after last week’s strength. MNI’s technicals team believes the precious metal is biased to further gains.

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