GOLD: Gold Gives Back Some Gains Overnight
- Gold's gave back gains from earlier in the week overnight, finishing down by -0.62% at US$3,294.52
- Fears over the fiscal position in the US has driven volatility and unsurprisingly a flight to safe haven assets like gold.
- Gold remains up over +2.5% for the week and remains firmly above all major moving averages. The nearest being the 20-day EMA of 43,270.80
- According to BBG, ETF;s cut gold holdings for fifth straight day overnight whilst remaining positive for the year.
Ghana's gold board anticipates up to US$12bn a year increase in revenue as gold production is doubled over the next year.
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NZD: Can't Hold Above 0.6000
The NZD had a range overnight of 0.5964 - 0.6029, Asia is pressing the lows as risk attempts to bounce once more.
- Treasury Secretary Bessent Tuesday privately told investors the tariff standoff is unsustainable and he expects de-escalation with China.
- “The IMF slashed its world growth forecast for this year and next, warning the outlook may deteriorate further amid risks of a global trade war. China’s growth estimate was cut to 4% in 2025 and 2026, down by 0.6 and 0.5 percentage points. Tariff threats have created uncertainty that’s “off the charts,” the funds chief said.”(per BBG)
- The move higher on Monday was in thin liquidity and looked overdone, as markets have stabilised and risk probes higher once more the move to sell USD has been unwound.
- The NZD could not hold onto to its gains above 0.6000 and has quickly retraced, after such a big move in such a short period, it would be healthy for the NZD to see a pullback and some consolidation.
- The price action continues to suggest though that dips will probably find demand, first support on the day is 0.5900 then 0.5800/50.
- CFTC data show Asset managers have been aggressively paring back their shorts last week, Leveraged funds not so much.
- NZD/USD: $0.5855(N$704mln) Expiry for Apr23 NY cut 1000ET (Source DTCC)
- Data : US S&P Global Services & Manufacturing PMI
Fig 1: NZD/USD Spot Hourly Chart
Source: MNI - Market News/Bloomberg
GOLD: Pulls Back On USD Bounce, But Still Well Above 20-day EMA Support
Gold is down sharply in early Wednesday dealings, with bullion off around 1.4%, last tracking near $3330/35. This follows an early bounce in the USD, which has been supported post comments made by US President Trump, who stated he has no intention of firing Fed Chair Powell. Gold session lows rest at $3315.94.
- The Trump remarks has boosted USD sentiment, as firing Fed Chair Powell would have eroded confidence in Fed Independence and hurt US exceptionalism. Gold is under pressure as it was seen as a natural beneficiary to eroding US exceptionalism.
- Outside of the USD move, we also have US equity futures up strongly, another gold headwind in the near term.
- Technically, the gold outlook is still bullish. The yellow metal traded to another fresh all-time high (briefly at the $3,500 level on Tuesday). Note too that moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. The next objective is $3,547.9, a Fibonacci projection, if a break back above $3500 can be sustained. Initial firm support lies at $3163.5, the 20-day EMA.
AUSSIE 10-YEAR TECHS: (M5) Remains Toward Top End of Recent Range
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.960 - High Apr 7
- PRICE: 95.755 @ 16:08 GMT Apr 22
- SUP 1: 95.420/95.300 - Low Feb 13 / Low Jan 14
- SUP 2: 95.275 - Low Nov 14 (cont) and a key support
- SUP 3: 94.640 - 1.0% 10-dma envelope
Aussie 10-yr futures extended a recent strong bounce through to the Friday close, putting prices through the top end of the recent range. The confirmed breach of 95.851, the Dec 11 high on the continuation contract, reinstates a bull cycle and focuses attention on resistance at 96.207, a Fibonacci retracement point. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition.
