Treading Water In Asia; On Track For Second Weekly Decline

Gold deals ~$2/oz higher to print $1,825/oz at typing, regaining some poise after dipping to fresh one-week lows earlier in the session (at $1,821.8/oz).

• To recap, gold closed $15/oz lower on Thursday, with the move lower facilitated by an uptick in the USD (DXY). The precious metal struggled to rise above neutral levels for much of the session, with little impetus observed on the release of (slightly) above-estimate U.S. jobless claims, and a fairly weak set of Eurozone and U.S. PMI figures.
• July FOMC dated OIS now price in ~72bp of tightening for that meeting, with an initial rise to ~82bp on Thursday (post-Powell’s demurral on Wednesday to rule out 100bp hikes) ebbing. Fedspeak has increasingly coalesced around a 75bp hike for July, with Fed Gov Bowman being the latest to do so on Thursday.
• Rate hike pricing further out has retreated, with OIS markets showing a cumulative ~184bp of tightening priced in for the remainder of ‘22 (down from >220bp earlier this week), reflecting debate from some quarters re: less aggressive hiking in case of a Fed-led economic slowdown.
• Looking to technical levels, previously outlined support and resistance levels remain intact at $1,787.0/oz (May 16 low) and $1,889.1/oz (trendline resistance from Mar 8 high) respectively.