GOLD: Bullion Higher On Lower US Inflation & Softer Risk Sentiment

Gold prices are moderately higher during APAC trading today as US Treasury yields are down slightly and US equity futures and some Asian indices are lower signalling a pullback in risk as trade tensions rise. Bullion is up 0.3% to $2944.65/oz, close to the intraday high of $2946.11 and above initial resistance at $2930.3. They rose 0.6% yesterday supported by the lower-than-expected US February CPI reading and are up around 1.3% this week.  

• The trend condition for gold remains bullish and the break above initial resistance has opened up $2956.2, the bull trigger. Initial support is at $2880.3, 10 March low.
• It is unclear what the impact of increased US protectionism is likely to be for gold in the medium-term as it could increase inflation but could also weigh on global growth. Europe and Canada retaliated for the US’s duties on steel and aluminium.
• Ukraine said on Tuesday that it was ready to agree to the US’ proposal for a 30-day ceasefire. America is now taking the plan to Russia, which has said it will only accept on its own terms but Bloomberg reported that President Putin is considering it. The US is threatening more sanctions as well as tariffs if Russia is uncooperative, which would also likely drive gold prices higher.
• Later US February PPI and jobless claims print. The ECB’s Lagarde and de Guindos appear and January euro area IP is released.