Gold was slightly higher overnight, trading in a narrow range of $1318.40 - $1322.45. It ticked up to its high early during Asian hours, boosted by a pullback in the US dollar (92.58 – 92.36).
Unrest in the Middle East over the opening of a new US embassy in Jerusalem was supportive of the yellow metal, as was some slightly dovish commentary from the usually ultra-hawkish Loretta Mester of the Fed ("We want to give inflation time to move back to goal ... this argues against a steep path,").
However, gold drifted back to its low later during European time, hurt by rising global bond yields (German Bund from 0.551% to 0.609%, UK Gilts from 1.448% - 1.490%, US 10-year from 2.959% - 2.988%), and mostly firmer global equities.
The NIKKEI gained 0.5%, the SCI rose 0.4%, Eurozone shares declined from 0.2% - 0.4%, while S&P futures were +0.2%. A perceived thawing in US-China trade (Trump pledged Sunday to help Chinese frim ZTE to “get back into business” after a US ban had hamstrung the company) helped boost stocks, as did firmer oil (WTI from $70.50 - $70.80).
After the NY open, gold ticked down to $1318.15, but support in front of yesterday’s $1318 low and former quadruple top resistance held.
By mid-morning, the DX slipped further (92.26), weakened by strength in the euro from some hawkish commentary from the ECB’s Villeroy, Lautenschlaeger, and Praet (recent easing of price growth was likely temporary, signaling the ECB was still on course to withdraw its monetary stimulus).
Gold traded up to $1321.20 in response, and was also aided by reports of increased violence in Gaza over the new US embassy (dozens of Palestinians killed, over 2k wounded), and some dovish comments by the Fed’s...