Gold rose last night, retaining its choppy tone – as can be expected of a market at 6-year highs – trading in a range of $1408 - $1425. It rallied to its $1425 high during Asian hours, lifted by weakness in global equities (NIKKEI off 0.3%, SCI down 0.6%, S&P futures to 2930), and a modest dip in the US dollar (DX to 96.14). The DX was weighed by some strength in the yen (108.85 – 107.56) from stronger Japanese CPI and Industrial Production Reports, and an early move to safe havens. Gold retreated to $1409 during early European time however, fading a recovery in stocks (European markets up from 0.3% to 0.5%, S&P futures), helped by some pressure on Trump and Xi to work together from other global leaders at the G20 (and Trump’s comment, “I think we have a very good chance of doing something”) an upgrade of Proctor and Gamble from Goldman, and strength in bank stocks (passed Fed stress tests yesterday, free to boost dividends and share repurchases). An increase in oil (WTI to $59.63) was also supportive of stocks, while a rebound in the DX (96.25) and a tick up in the US 10-year bond yield (2.029%) also contributed to gold’s pullback. Later during European time, gold traded back up to $1415, as the DX fell back to 96.05. The greenback was pressured by strength in the euro ($1.1359 - $1.1393) from better readings on Germany’s Import Prices and Eurozone CPI, and the pound ($1.2664 - $1.2698) as UK GDP and Business Investment matched expectations.
At 8:30 AM, US Personal Spending (0.4%), PCE Deflator (0.2%), and Core PCE (0.2%) were all as expected (0.4%), while Personal Income was slightly better (0.5% vs. exp. 0.3%). S&P futures moved back to its overnight high...