GOLD: Bullion Range Trading As Waits For Fed Announcement
Gold prices are off their earlier low to be little changed in the APAC session. They fell to $3322/oz and are now around $3329.4, possibly supported by uncertainty created by tsunami warnings around the Pacific. Bullion has been in a narrow range though as markets wait for the FOMC decision later today (see MNI Fed Preview). Rates are widely forecast to be unchanged and so the tone will be monitored for any changes. Easing is expected for later in the year. US yields and the US dollar are also in a holding pattern.
- Gold will continue to watch US trade talk progress especially with South Korea and Brazil. US data over the rest of the week, especially Friday’s payrolls, could also drive price movements.
- Silver is up slightly at $38.234 after falling to $38.011.
- Equities are mixed with the S&P e-mini up 0.1% & KOSPI +1.2% but Hang Seng down 0.4% and Straits Times -0.4%. Oil prices are moderately higher after rising strongly on Mon/Tues. WTI is +0.1% to $69.29/bbl. Copper is up 0.7%.
- Not only is the Fed decision announced later today but advanced US Q2 GDP and July ADP employment print. Preliminary Q2 euro area GDP, July EC survey, Spanish July CPI, German June retail sales are also released. Data on both sides of the Atlantic will be watched for signs of any tariff impact. BoC also announces but is also expected to be on hold.
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JPY: Asia Wrap - USD/JPY Comes Off, Testing 144.00
The Asia-Pac USD/JPY range has been 144.08 - 144.76, Asia is currently trading around 144.09, -0.40%. USD/JPY has drifted lower in our session, though still in the middle of its wider 142.00 - 148.00 range. "US President Donald Trump characterized trade in cars between the US and Japan as unfair and floated the idea of keeping 25% tariffs on autos in place." (BBG)
- The Real Fly on X: "Trump criticized the U.S.–Japan auto-trade relationship as unfair, referring to Japan’s negotiator as “MR. Japan,” and warned of possible new tariffs ahead of the looming JULY 9 deadline.” https://x.com/The_Real_Fly/status/1939488012741521660
- (Bloomberg) -- Japan's industrial production rose less than expected in May, missing analysts' estimates as the US tariffs hit the nation's exports. Factory output increased 0.5% from the previous month, the Industry Ministry reported Monday. Economists had expected a 3.5% gain. Output fell 1.8% from a year earlier, missing expectations of a 1.6% rise.
- CFTC data shows Asset managers paring back their JPY longs very slightly +93003, while leveraged funds added to their longs again trying to rebuild their position +15935.
- The rejection of 148.00 points to a potential top being in place now and shows just how quick the market is to return to selling USD’s. USD/JPY is looking for a fresh catalyst in the middle of its 142.00 - 148.00 range, while the USD continues to move lower this should see sellers on any bounce for now.
Options : Close significant option expiries for NY cut, based on DTCC data: 143.85($985m), 145.50(845m).Upcoming Close Strikes : 143.85($885m June 30), 145.00($1.02b July 1)
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
GOLD: Gold Set for Worst Month of 2025
- Gold edged modestly higher in the Asia trading day, gaining +0.15% to US$3,279.45.
- The gains weren't enough to extinguish the losses for the month and bullion remains down -0.30% for June and facing its first monthly loss of 2025.
- Gold traders will eye closely the US data this week for further indications for interest rates as the input into gold's next move.
- Gold has traded below the 50-day EMA of $3,289.72. The first times this year bullion has fallen below the 50-day EMA.
China's biggest gold and copper producer Zijin Mining Group is to buy a gold project in Kazakhstan for US$1.2bn.
AUD: Asia Wrap - AUD struggling To Bounce
The AUD/USD has had a range of 0.6527 - 0.6543 in the Asia- Pac session, it is currently trading around 0.6535, +0.08%. A tight range in a very quiet Asian session, US Equity futures have opened strongly in Asia printing new all-time highs, ESU5 +0.4%, NQU5 +0.5% after Canada rescinds its digital services tax. The AUD has surprisingly had very little reaction to this as it still looks for a catalyst to probe above the 0.6550/0.6600 resistance. CFTC Data shows Asset managers increasing their shorts -36967, the Leveraged community has also added to their shorts -22963. Given how poorly the USD is trading one would expect most of these shorts are being expressed in the crosses where the AUD trades poorly particularly against the EUR and GBP.
- Private credit rose 0.5% m/m (estimate +0.6%) in May versus +0.7% in April.
- Melbourne Institute inflation index rose 0.1% m/m in June versus -0.4% in May. Inflation index rose 2.4% y/y versus +2.6% in May.
- (Dow Jones) “Recent turmoil in global financial markets is fueling overseas demand for New South Wales state government bonds, despite concern about a rise in public-sector debt levels in Australia.”
- The AUD/USD is attempting to break through the top of its recent range as the pressure on the USD increases.
- The AUD needs a sustained break above 0.6550/0.6600 to potentially start building momentum for an extended move higher, a close back above 0.6600 and the focus would turn back to 0.6900/0.7000.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6425(AUD836m). Upcoming Close Strikes : 0.67500(AUD1.27b July 2), 0.6600(AUD907m July3).
- AUD/JPY - Today's range 94.15 - 94.54, it is trading currently around 94.25. Choppy price action as the pair establishes a range between 92.00 - 96.00. Should risk build on this move, focus could turn back to the 96.00 area.
Fig 1: AUD CFTC Data
Source: MNI - Market News/Bloomberg Finance L.P
