Diamond News

Gold softened overnight in a range of $1243.10 - $1237.45, trading against strength in the US dollar.

The DX firmed from 97.07 – 97.62, boosted by weakness in the yuan (6.880 – 6.902, weaker Retail Sales, Industrial Production) the pound ($1.2660 - $1.2555, May fails to make progress on Brexit on her trip to Brussels), and the euro ($1.1365 - $1.1285, weak Eurozone PMIs, Draghi’s comments yesterday still resonating).

Global equities were lower and gold supportive, hurt by the weaker economic data from China with the NIKKEI -2%, the SCI off 1.5%, European shares were off from 0.8% to 1%, and S&P futures were -0.9%. Lower oil prices (WTI from $53 to $52.13, soft Chinese data soften demand prospects) weighed on stocks.

At 8:30 AM, US Retail Sales were stronger than expected (0.2% vs. 0.1%, with last month’s Sales revised up from 0.8% to 1.1%).

S&P futures rose to 2628, while the US 10-year bond yield moved up to 2.893%. The DX popped to 97.71, taking out last month’s 97.70 top to make a fresh 18-month high.

Gold plunged in response, taking out stops below the overnight low and $1237 (12/7 low), $1235 (12/6 low) on the way to $1233 – where support at the 12/5 low held. A fair amount of long liquidation was seen.

At 9:15AM, US Industrial Production was also better than expected (0.6% vs. exp. 0.3%), and US stocks through their open (S&P -15 to 2635). The 10-year yield ticked up to 2.90%, but the DX came off its high (profit taking) to 97.60. Gold was caught in the cross currents, and traded up to $1235.

Later in the morning, US stocks turned down (S&P -44 to 2606), with losses in J&J (report the company knew for...

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