Diamond News

Gold continued to pullback last night, moving lower in a range of $1321.60 - $1327.

The yellow metal traded up to its $1327 high during Asian time where it was capped by the old resistance level $1325-27.

The move was fueled by a modest dip in the US dollar (DX from 96.64 – 96.53), which was pressured from strength in the euro ($1.1330 - $1.1351) as German GDP (yoy) came in +0.9% as expected.

Gold retreated to its low of $1321.60 later during European hours where support from yesterday’s low held.

A rebound in the DX to 96.79 forced gold lower, which was boosted by a pullback in the euro ($1.1317, disappointing German IFO) and the pound ($1.3051 - $1.2968, EU states it can’t provide legally binding changes to the Irish backstop, Barnier fears accidental no-deal Brexit in 5 weeks).

Global equities were mostly stronger and a headwind for gold, with optimism over the US-China trade talks fueling gains.

The NIKKEI off 0.2%, the SCI was up 1.9%, European shares were up from 0.3% to 0.5%, and S&P futures were +0.5%. An increase in oil prices (WTI from $56.70 - $57.78) helped lift equities.

Just ahead of and through the NY open, US stock futures (S&P futures to 2779) dropped on news that the EU was ready to target Caterpillar, Xerox and others with tariffs if Trump targets EU cars with tariffs along with a plunge in Kraft Heinz (misses earnings, reveals SEC subpoena).

The US 10-year bond yield dropped from 2.685% to 2.655%, and the DX tumbled back to 96.53. Gold popped in response, and took out buy stops over last night’s high and former breakout level $1325-27 to reach $1330.70. A fair amount of short covering was seen....

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