Gold had a modest rebound last night after yesterday’s $17 thumping, rising in a tight range of $1291.20 - $1295.80. It was helped by a pullback in the US dollar (DX from 97.18 – 96.80), which was lifted by strength in the pound ($1.3050 - $1.3119, UK Government and Labour Party resumed talks at breaking deadlock in Parliament over Brexit, May hints at customs union compromise) and the euro ($1.1251 - $1.1322, stronger Eurozone Industrial Production) that overcame some weakness in the yen (111.55 – 111.99, improving risk sentiment). A climb in global bond yields (JGB from -0.059% to -0.0355%, US 10-year from 2.49% - 2.547%, German Bund from -0.024% to +0.045%, UK Gilt from 1.125% to 1.200%) and firmer global equities were a headwind for gold, however. The NIKKEI rose 0.7%, the SCI was flat, European markets were up from 0.3% - 0.5%, and S&P futures were +0.5%. A rebound in oil (WTI to $64.62) was supportive of equities as was growth in China’s credit (New Yuan Loans and Aggregate Financing exceed expectations) and exports.
Ahead of the NY open, better earnings reports from JPM Chase, Wells Fargo, and PNC along with news that Chevron was buying Anadarko Petroleum, and that Disney unveiled a new streaming service lifted S&P futures further (2908). Though the DX continued to soften (96.77), gold came off its high and slipped to $1292.
At 8:30 AM, a stronger than expected reading on US Import Prices (0.6% vs. exp. 0.4%) and Export Prices (0.7% vs. exp. 0.2%) were another boost to S&P futures (2912). The US 10-year bond yield climbed to 2.553% (3-week high), and the DX had a brief slight bounce to 96.82. Gold sank further, but found support at $1290.50.
US stocks opened stronger (S&P +22 to 2910,...