Diamond News

Gold rose overnight in a range of $1311 - $1318, but was capped at the quadruple top resistance area of $1318 -19 (5/3, 5/7, 5/8 and 5/9 highs).

It was fueled by a softening in the resurgent US dollar, which traded down from 93.17 – 92.80. The greenback was pressured by some strength in the euro ($1.1845 - $1.1891) and the pound ($1.3545 - $1.3615 – bid up ahead of BoE statement).

At 7AM, the pound tanked ($1.3490) after the Bank of England left rates unchanged, and on Carney’s subsequent dovish comments (wanted to see a pick up in the next few months before raising rates, lowered GDP and inflation forecasts).

The DX rallied back to 93, and pressed gold down to $1317 ahead of the NY open. News that Israel struck some Iranian targets in Syria after receiving rocket fire on the Golan Heights was supportive for gold, as well as a pullback in the US 10-year bond yield from 3.006% to 2.97%.

Global equities were mostly firmer and a headwind for gold with the NIKKEI +0..4%, the SCI up 0.5%, Eurozone shares ranged from -0.3% to +0.3%, and S&P futures were +0.1%. A continued advance in oil (WTI from $71.20 - $71.84, high since Nov. ’14, looming sanctions on Iran), supported equities.

At 8:30 AM, lower than expected reading on US CPI (0..2% vs. exp. 0.3%) and Core CPI (0.1% vs. exp. 0.2%) overcame a lower reading on Jobless Claims (211k vs. exp. 219k).

S&P futures popped to 2706, and the 10-year yield slipped further (2.948%). The DX tumbled, and took out its overnight low to reach 92..53. Gold rallied, and finally breached the quadruple top at $1318-19 to reach $1323, with some short covering seen.

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