Working Away From Thursday’s Lows; $1,700/oz Holds As 75bp Fed Hike Increasingly Priced

Gold deals ~$7/oz firmer to print $1,716/oz at typing, extending a move off of Thursday’s trough at writing (~$1,704.1/oz, following the ECB’s policy decision and Powell’s speech).

• Gold has largely kept above $1,700/oz in recent sessions as pricing for a 75bp hike at the Sep FOMC has continued to firm, with yesterday’s better-than expected weekly jobless claims data marginally contributing to the case for a 75bp move.
• Chicago Fed Pres Evans (‘23 voter) on Thursday stated that the Fed could “very well do 75 in September”, adding to the market’s firmer expectations for such a move after Fed Chair Powell earlier did little to push back against the idea at the upcoming FOMC.
• Total known ETF holdings of gold are on track for a 13th consecutive weekly decline, taking the measure to levels last witnessed in mid-Feb, pointing to persistent weakness in investor interest for bullion.
• From a technical perspective, previously-identified technical levels remain in play for gold, with a clear break of initial resistance at $1,726.7 (6 Sep high) eyed, while support is located at $1,681.0 (Jul 21 low and bear trigger).