Weaker In Asia; $1,800 Eyed

Gold trades $2/oz lower to print $1,805/oz, operating a little above Thursday’s troughs at typing. The precious metal is on track for its third straight weekly decline, with the USD (DXY) and U.S. real yields remaining within sight of cycle highs made around mid-June.

• To recap, gold hit seven-week lows mid-way through Thursday’s session on a surge in the USD (DXY) to its own two-week highs, ultimately closing ~$10/oz lower on Thursday for a fourth consecutive daily loss.
• July FOMC dated OIS price is ~65bp of tightening for that meeting, with odds of a 75bp hike for that meeting pulling to its lowest levels in two weeks. The shift lower comes after the revision in the Atlanta Fed GDPNow (implying a technical recession in 1H22), likely feeding into well-documented debate re: a Fed-led economic slowdown.
• Looking ahead, U.S. m’fing PMIs and the ISM m’fing survey are due ahead of the NY session.
• From a technical perspective, the move lower in gold on Thursday has broken initial support at $1,805.2/oz (Jun 14 low), with a clearer break of the level potentially exposing further support at $1,787.0/oz (May 16 low and bear trigger).