Gold traded either side of unchanged last night in a range of $1296 - $1303. It rose to its $1303 high early during Asian hours – despite the DX remaining somewhat steady around 94.80.

The yellow metal was boosted by weakness in Asian equites (NIKKEI off 1.5%, SCI off 2.55%), which were hurt by concerns over US-China trade talks (US said it would proceed with tariffs on $50B in Chinese imports and investment restrictions), and the ongoing political instability in Italy.

During European time, the euro rebounded ($1.1648) from 10-month lows reached yesterday, as did Eurozone stocks and S&P futures (+0.2 to 0.6%), while Italian bond yields dipped back to 2.85% on reports that the Italian parties were seeking “a point of compromise on another name” for economy minister.

Stronger readings on German Retail Sales and CPI aided the strength in the common currency. This knocked the DX down to 94.30, but gold also came off, dipping to its $1296 low in response to lessening of the perceived political instability.

At 8:15 AM the US ADP Employment Report was lower than expected (178k vs. exp. 190k), with a 41k downward revision to last month’s gain.

This was followed at 8:30 AM by a lower than expected 1st Revision on Q1 GDP (2.2 vs. exp. 2.3%), a weaker GDP Price Index (1.9% vs. exp. 2.0%), and a lower Core PCE (2.3% vs.exp. 2.5%).

The US 10-year bond yield dipped from 2.87% to 2.821%, and the DX slipped to 94.23. Gold rallied back in response, but topped out at $1302 in front of resistance at $1303 - the overnight high and the down trendline from 4/11 $1365 top.

US stocks opened stronger and firmed into mid-day (S&P +35 to 2725, financials...

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