Gold was quietly steady last night, trading either side of unchanged in a narrow range of $1290.25 - $1294.60. The yellow metal dipped to its $1290.25 low during early Asian hours, as the US dollar retained its firm tone (DX holds 97.30), helped by some weakness in the yen (111.28 – 111.58, anti-risk yen offered), a move up in the US 10-year bond yield (2.522% - 1-week high), and continued strength in global equities. The NIKKEI was up 1.0%, the SCI rose 1.2%, European markets were up from 0.1% to 1.2%, and S&P futures were + 0.5% with optimism over the progress of the US –China trade negotiations (FT reports most outstanding issues resolved, Liu He in Washington today to resume talks) and a strong reading on China’s Caixin Services PMI fueling the advance. However, gold rebounded to its $1294.60 high during later Asian and European time – albeit in a choppy fashion- as the US dollar pulled back below 97 to reach 96.96. The greenback was pressured by strength in the pound ($1.3121 - $1.3185 hopes for a Brexit resolution as PM May meets with Labour’s Corbyn today, shrugs off weak Services PMI), and the euro ($1.1200 - $1.1255, German 10-year bund yield turns positive off stronger German and Eurozone PMI data).
At 8:15 AM, a weaker reading on US ADP Employment Change (129k vs. exp. 180k) knocked S&P futures off their highs (2886 to 2882), and tugged the US 10-year yield down to 2.51%. The DX, which had a modest bounce to 97.06 fell back to 97, and gold – which had slipped to $1291 – bounced to $1294.
US stocks continued to pare gains through their open (S&P +8 to 2875), while the 10-year yield hovered around 2.515%. The DX, however, turned higher...