Stronger US Equities Holding Back Bullion, Market Watching Fed Closely

Gold broke through $2000 to a high of $2003.05/oz on Friday on continued banking concerns but it struggled to hold these gains once US equities began to rally. It ended the session down 0.75%. During today’s APAC trading bullion has been range trading and is down 0.1% to $1975.45 following a low of $1970.96, as the S&P e-mini is 0.5% higher. The USD index is down 0.1%.

• Increased recession risks in the wake of recent banking troubles and the implication that there will be less Fed tightening have driven increased positioning in gold. The outlook on these factors remains unclear and so any developments are likely to drive bullion going forward.
• On the weekend, the Minneapolis Fed’s Kashkari said that it was too early to gauge the impact of the banking crisis, while others have said that the Fed’s focus remains inflation, which could mean more tightening.
• The Fed’s Jefferson speaks later on monetary policy (2200 BST). ECB’s Elderson and BoE’s Bailey are also scheduled to speak. US Dallas Fed Index for March prints as well as the German IFO.