GOLD TECHS: Breaches Key Short-Term Support
- RES 4: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
- RES 3: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
- RES 2: $3500.1 - High Apr 22 and bull trigger
- RES 1: $33346.5/3451.3 - 20-day EMA / High Jun 16
- PRICE: $3262.9 @ 14:36 BST Jun 27
- SUP 1: $3245.5 - Low May 29
- SUP 2: $3204.7 - Low May 20
- SUP 3: $3121.0 - Low May 15 and key support
- SUP 4: $3085.0 - 76.4% retracement of the Apr 7 - 22 bull leg
Gold is trading lower as the yellow metal extends the pullback from $3451.3 high on Jun 16. Two key short-term levels have been breached; $3290.9, the 50-day EMA, and 3294.8, a trendline drawn from the Dec 30 ‘24 low. A clear break of both support points would signal scope for a deeper correction - this would expose $3245.5. A reversal higher would refocus attention $3451.3, Jun 16 high. Initial resistance is at $3346.4, the 20-day EMA.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS/OVERNIGHT REPO: SOFR Jumps Post-Holiday, With Month-End Yet To Come
Secured rates saw a large jump Tuesday versus last week's unusually soft levels, with SOFR up 5bp (vs Friday, after Monday's holiday) to 4.31%. That brings SOFR back to levels last seen on May 15. Elsewhere, GCF Treasury Repo printed 4.38%, up 8bp and the highest since May 2.
- As we noted Tuesday, downward pressures on secured rates last week exerted in part by temporary GSE cash in the system was due to dissipate this week, and upside pressures are likely to persist toward week-end exacerbated by Friday's month-end dynamics.
- Other factors to watch include Friday's $46B in net new cash raised via coupon auction settlements (upward rate pressure), while Thursday's rates could be temporarily subdued in the meantime by $29B in net bill paydown (downward rate pressure).
- Effective Fed funds was as usual unchanged Tuesday (4.33%).
REPO REFERENCE RATES (rate, change from prev. day, volume):
* Secured Overnight Financing Rate (SOFR): 4.31%, 0.05%, $2655B
* Broad General Collateral Rate (BGCR): 4.30%, 0.04%, $1061B
* Tri-Party General Collateral Rate (TGCR): 4.30%, 0.04%, $1025B
New York Fed EFFR for prior session (rate, chg from prev day):
* Daily Effective Fed Funds Rate: 4.33%, no change, volume: $115B
* Daily Overnight Bank Funding Rate: 4.33%, no change, volume: $293B
GILTS: Cross-Market Cues Dominate
Gilts following wider bond/cross-market cues, with a recovery from lows seemingly aided by a bid in semi-core & peripheral EGBs before an uptick to fresh session highs in crude oil provided some counter.
- Futures closed the opening gap lower (91.36), topping out at 91.37, before a fade back to ~91.15.
- The technical backdrop in the contract remains bearish.
- Extension through today’s low (90.98) would expose the May 23 low (90.46).
- Initial resistance located at the May 20 high (91.87).
- Bear flattening theme intact, yields 1.5-3.5bp higher.
- 2s10s ~64.4bp last, little changed on the day, unable to re-challenge cycle closing highs at 64.4bp in recent weeks.
- 5s30s ~1.5bp flatter on the day at 126.8bp, also unable to break closing cycle highs at 138.6bp in recent weeks.
- While fundamentals and the UK fiscal picture point to continued curve steepening, the DMO’s more activist approach to issuance (ongoing skew further forwards in terms of the maturity profile, as it looks to facilitate demand changes) presents ongoing risks to this idea.
EQUITIES: US Cash Opening Calls
US Cash opening calls, set for a steady Open.
- SPX: 5,925.7 (+0.1%); DJIA: 42,318 (-0.1%/-25pts); NDX: 21,445.2 (+0.1%).
