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Steady After Wednesday’s Rebound, Awaiting US Data

GOLD

Gold is slightly lower in the Asia-Pac session, after closing 0.7% higher at $2174.41 on Wednesday.

  • Wednesday’s move came despite US Treasury yields pushing 3-5bps higher ahead of Thursday’s PPI and Retail Sales data.
  • A stronger-than-expected retail report could further dent hopes, and dampen market sentiment, for a mid-June rate pivot by the Federal Reserve.
  • Projected rate cut pricing over the next three FOMC meetings continues to evaporate: March 2024 chance of a 25bp rate cut is currently at 1.5%; May 2024 at a cumulative 12% and June 2024 at a cumulative 59%.
  • According to MNI’s technicals team, the recent break above resistance at $2135.4, the Dec 4 high, signals scope for $2206.6 next, a Fibonacci projection. Firm support is at $2095.2, the 20-day EMA.
  • Meanwhile, silver outperformed yesterday, rising by 3.5% to $25/oz. As a result, the gold/silver ratio is down sharply on the day, to its lowest level since Feb 19.

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