Diamond News

Gold was a tad firmer overnight, but confined to a narrow range of $1198.40 - $1203.50, with activity a bit muted ahead of the US Payroll Report.

Gold was boosted by a modestly weaker dollar, as the DX slid from 95.05 – 94.87.

The dollar was pressured by early strength in the yen (110.90 – 110.41, stronger Japanese Household Spending, safe haven flows), a gain in the pound ($1.2915 - $1.3028, EU’s chief negotiator Barnier said they are open to discussing other backstops with regards to the Irish border, and that a no deal scenario is “not our scenario”), and some strength in some emerging market currencies (Turkish lira, Indonesian rupiah, South African rand, Mexican peso, and Indian rupee).

Mostly lower global equities were a tailwind for gold, with the NIKKEI off 0.8%, the SCI was up 0.4%, European markets were down from 0.2% to 0.7%, and S&P futures were -0.1%.

At 8:30 AM, the much awaited US Payroll Report was stronger than expected, with Nonfarm Payrolls up 201k (vs. exp. 195K), and with Average Hourly Earnings up a hefty +0.4% (vs. exp. 0.2%). The probability of future Fed 25 bp rate hikes increased markedly on the report according to FedWatch:

Equity futures initially sold off (-15 to 2865), and the US 10-year bond yield leaped from 2.882% to 2.95% (1-month high).

The DX shot up to 95.35, and gold sold off. The yellow metal tripped stops under $1200 and $1196 (yesterday’s low) on the way to $1193.50. However, as we’ve seen time and again in recent weeks, dip buying emerged to bring gold back to the $1200 area.

Later in the morning, US stocks turned positive (S&P +7 to 2884), helped by upbeat comments from White House economic advisor Larry...

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