Gold moved higher overnight in a range of $1198.70 - $1209.15. After ticking down to its low during early Asian hours, gold climbed higher against weakness in the dollar (DX from 94.77 – 94.54).
The DX was pressured by strength in the yen (111.05 – 110.68, uptick in Japan’s Core CPI), the yuan (6.835 – 6.8245, stronger than expected Chinese PMI), and by a rebound in some emerging market currencies (Turkish lira from 6.785 – 6.49, Turkey waives a tax on lira savings, Russian rouble from 68.25 – 67.80).
Weaker global equities aided gold’s climb with the NIKKEI -0.1%, the SCI of 0.55, Eurozone shares were down from 0.5% to 1.1%, and S&P futures were -0.2%. Comments from Trump late yesterday rejecting an EU deal to scrap tariffs on cars, and threatening to pull out of the WTO along with weaker oil prices (WTI from $70.15 - $60.64) contributed to the softness in stocks.
Just before the NY open, reports emerged that US-Canadian talks had stalled, and a deal won’t be reached by today (the unofficial deadline), with a rumor that Trump said the US proposal is “going to so insulting that they’re not going to be able to make a deal”. S&P futures sold off (-7 to 2895) and the US 10-year bond yield sank to 2.8833%. The Canadian dollar tumbled (1.30 – 1.3071), and the DX shot up to 94.97. Gold sold off, but found support just in front of $1200.
Later in the morning, stronger than expected reports on the Chicago PMI (63.5 vs. exp. 63) and the University of Michigan Consumer Sentiment Index (96.2 vs. exp. 95.5) helped US stocks pare losses (S&P -7 to 2907), and pushed the 10-year yield up to 2.848%. The DX drove higher, also fueled...