Diamond News

Gold was fairly steady overnight, trading either side of unchanged in a narrow range of $1203.20 - $1208. It consolidated its $20 gain from Friday, with activity a bit muted due to the UK on holiday.

Early during Asian hours, gold slipped to its low as it faded some strength in the US dollar - which was buoyed by weakness in emerging market currencies (Turkish lira plunged 3.5% after weeklong holiday), and the euro ($1.1650 - $1.1595).

Later during European time, gold recovered as the DX softened from a bounce in the euro ($1.1622) from a better than expected German IFO Report.

Global equities were firmer and a headwind for gold, still riding the bullishness from Powell’s speech on Friday. The NIKKEI was up 0.9%, the SCI gained 1.9%, Eurozone shares were +0.5-0.6% (UK on holiday), and S&P futures were +0.2%. A dip in oil (WTI from $68.64 – $68.33) weighed on stocks.

Just ahead of the NY open, news emerged that the US and Mexico were close to concluding their trade deal. Along with this was a comment from Economist Mohamed El-Erian saying there's a 60 percent chance that Trump's hard line with China and Europe yields "fairer trade”.

S&P futures popped higher (+10 to 2888), and the yield on the US 10-year bond climbed from 2.815 – 2.815%. The dollar softened (DX to 95) as the Mexican Peso rallied strongly (18.86 – 18.66), the Chinese yuan strengthened (6.8245 – 6.8155), and the euro continued to climb ($1.1650). Gold rose, but was initially capped in front of the overnight high at $1208.

By late morning, Trump announced that the US and Mexico indeed reached a trade deal, paving the way to replace the much-maligned NAFTA deal, with negotiations with Canada to...

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