- Gold declines against a further climb in bond yields
Overnight – gold rallies to $1509 against a weaker US dollar
- Gold advanced overnight, climbing in a range of $1496 - $1509.
- · The move was fueled by a pullback in the US dollar (DX from 98.40 – 97.99), which was pressured from strength in the yen (108.26 – 107.90) from stronger Japanese Industrial Production and Capacity Utilization), the pound ($1.2330 - $1.2474) on reports the EU is ready to grant another Brexit extension), and the euro ($1.1065 - $1.1109) which continued its rebound after yesterday’s plunge from ECB’s easing.
- · The yellow metal was able to climb despite significant gains in global equities (NIKKEI up 1.1%, SCI +0.8%, European markets unch. to +0.4%, and S&P futures +0.3%) and a further rise in the US 10-year bond yield (1.768% to 1.815%, fresh 5-week high) from additional easing of US-China trade tensions (Trump signals he would be willing to consider an interim deal, China to buy US pork and soybeans and will exempt them and other farm goods from additional tariffs)
- · At 8:30 AM, US Retail Sales were better than expected (0.4% vs. exp. 0.2%, last month’s reading revised higher).
- · S&P futures edged higher (+10 to 3021), and the US 10-year bond yield climbed to 1.84%.
- · The DX recovered to 98.19, and gold retreated to $1498.
- · However, as we’ve seen many countless times recently, dip buying emerged to quickly lift the market back to $1501.