Gold softened last night, sliding in a range of $1402.30 - $1412.15. Stops were hit under $1412 (yesterday’s low, and Friday’s high), which tripped some profit taking from longs and helped accelerate the selling down to support ahead of Monday’s $1402 low. Gold faded a bounce in the US 10-year bond yield (1.992% - 2.028%) and some strength in the US dollar (DX from 96.15 – 96.32). The dollar was lifted by a retreat in the safe haven yen (107.10 – 107.75), and a softer pound ($1.2693 - $1.2662, BOE’s Carney said they may cut rates in case of no-deal Brexit, Johnson says 10/31 is “do or die”) and euro ($1.1372 - $1.1351, miss on German GfK Survey). A rally in equities during European time (European shares up from 0.1% to 0.5%, S&P futures +0.5%) off of upbeat comments on US –China trade from Treasury Secretary Mnuchin (“We were about 90% of the way there [with a deal] and I think there’s a path to complete this”) was also a headwind for gold. Firmer oil (WTI from $57.80 - $59.13) from a larger than expected draw in US oil and gasoline inventories aided the advance in stocks.
At 8:30 AM, a weaker than expected reading on US Durable Goods (-1.3% vs. exp. -0.1%) combined with a comment from Trump that Google and Facebook should be sued over bias allegations knocked S&P futures lower (2927), and took the 10-year bond yield down to 2.007%. The DX edged down to 96.23, and gold advanced to $1412 – where resistance held.
US stocks opened firmer (S&P +15 to 2932), with Mnuchin’s positive outlook on the US-China trade negotiations still resonating and with the IT and Energy sectors pacing the advance. The US 10-year yield bounced to 2.021%, and the...