Diamond News

Gold traded lower overnight in a narrow range of $1291.20 - $1286.30, but it held above the key support level of $1285 (yesterday’s low, up trendline from 12/15/16 $1123 low).

It traded against a firmer dollar (DX up to 93.65), which was boosted by weakness in the yen (110.71 – 111.08, weaker Japanese CPI) and the euro (dips to near 5-month low at $1.1771, Italian political concerns outweigh stronger German WPI and PPI reports).

A move up to a fresh 7-year high in the US 10-year bond yield (3.128%) boosted the greenback and was also a headwind for gold, as were mostly firmer global equities.

The NIKKEI rose 0.4%, the SCI gained 1.2%, Eurozone shares were flat to -0.1%, and S&P futures were +0.2%. A modest increase in oil (WTI from $71.50 - $71.75) aided the up move in stocks.

After the NY open, further weakness in the euro ($1.1749) and the pound (near 4-month lows at $1.3454, Brexit concerns, BoE dovishness) pushed the DX higher to 93.83 – a fresh 5-month high.

Gold, which had drifted up previously to $1288.50 was knocked back to $1286, but support ahead of $1285 was solid and held.

From mid-morning into the afternoon, US stocks turned down (S&P -11 to 2709) as tensions surrounding the trade talks between the US and China and a downbeat assessment on NAFTA negotiations by US Trade Rep Lighthizer weighed on sentiment.

A dip in oil (WTI down to 71.08) was also a headwind for stocks. The 10-year yield pulled back to 3.071%, and the DX was tugged down to 93.55.

Gold popped up in response and took out some stops over the overnight high ($1291.20) and yesterday’s reaction high at $1291.50 to reach $1294.50 – where resistance...

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