Diamond News

Gold traded a little lower overnight, but remained in a narrow range of $1296.45 - $1299.80, with market participants wary of putting on significant positions ahead of tomorrow’s FOMC meeting.

It dipped to its low during early Asian hours as the Trump – Kim summit further diffused geopolitical risk on the Korean Peninsula, and as the dollar index reached a 1-week high at 93.90.

The yellow metal recovered to $1298.75 during European time, as the DX softened (DX to 93.46) against some strength in the pound ($1.3343 - $1.3418) and euro ($1.1757 - $1.1807).

Global equities were mixed, with Asian markets higher off of the euphoria of the summit (NIKKEI +0.3%, SCI +0.9%), but European markets (flat to -0.3%), and S&P futures (+0.1%) had more tempered reactions.

Just ahead of the NY open, a much better than expected reading on the US NFIB Small Business Optimism Index (107.8 vs. exp. 105) helped a move up in the US 10-year yield (2.977%), and a recovery in the DX to 93.68.

This knocked gold through support at the overnight low and $1294-95 (quadruple bottom – 6/6, 6/7, 6/8, and 6/11 lows) to reach $1293, where it found support ahead of the up trendline support at $1292.

As we have seen many times before, though, bargain hunting bids emerged to take gold quickly back to the $1295 area.

The US CPI Report at 8:30 AM was in line with expectations (0.2% for both the overall reading and the core) and market reaction was muted.

US stocks opened down to flat, and the US 10-year yield retreated from 2.976% to 2.961%. The dollar pulled back to 93.52, and gold shot up amid a lack of offers to $1299.50.

Later in the morning and...

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