GOLD: Gold Finishes Down After Record High As USD Strengthens Following The Fed

RBNZ-dated OIS pricing is slightly firmer across meetings ahead of tomorrow’s RBNZ Policy Decision.

• 23bps of easing is priced for tomorrow’s meeting, with a cumulative 41bps by November 2025.
• Notably, pricing is 8-14bps softer across meetings versus late July’s pre-CPI levels.
• NZ CPI rose less than economists expected in Q2. Headline CPI rose 0.5% q/q 2.7% y/y (estimate +0.6% and 2.8%). Tradeables rose 0.3% q/q, less than forecast, while non-tradeables were in line at 0.7% q/q.

Figure 1: RBNZ Dated OIS Current vs. Pre-CPI (%)

Source: Bloomberg Finance LP / MNI 

• Gold tread water overnight finishing unchanged at US$3,332.95.  
• As the Federal Reserve's annual get together at Jackson Hole nears, the gold market will be anxiously looking for signals on monetary policy.  
• From Friday, the FED hosts Central Bankers from major central banks globally and with markets predicting an upcoming rate cut, they will be pouring over any comments to re-affirm that view.  
• The Fed’s Raphael Bostic was quoted as saying that he is open to a cut in rates soon, noting that tariffs are creating pressures and that business profits could benefit from lower rates.   
• Gold has opened weaker in the Asia trading day and attempting to hold below the 50-day EMA of $3,334.67.  Below sits the 100-day EMA of $3,262.00.
• Exchange-traded funds added 147,088 troy ounces of gold to their holdings in the last trading session, bringing this year's net purchases to 9.28 million ounces, 11% higher according to BBG.

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In post-Tokyo trade, JGB futures closed weaker, -11 compared to settlement levels, with US tsys finished slightly weaker after an extremely subdued NY session.

• Attention was on the White House meeting on Ukraine, with President Trump hosting President Zelensky, Chancellor Merz, President Macron, Prime Ministers Starmer, Prime Minister Meloni, President Stubb, NATO Secretary General Rutte, and EC President Ursula von der Leyen.
• The upcoming Jackson Hole speech from Fed Chair Powell on Friday is muting activity too, as analysts wait for signals on a September rate cut.
• "As Jackson Hole steams into view, the bar for dovish rhetoric is high, lending a crucial pillar of support to the listless greenback. After a historically rough first half, the dollar has steadied and is drifting as expectations for Fed easing fluctuate. " – BBG
• (Bloomberg) -- Japan's auction of 20-year government bonds on Tuesday will be closely watched as the risk of a government spending surge weighs on investor appetite for super-long debt. The nation's longer-maturity bonds have been in sharp focus after the ruling coalition lost its majority at last month's upper house election.
• The local calendar will see 20-year supply.