GOLD: Gold Lower, Friday’s US PCE Prices Next Watch Point

NZGBs closed at session bests, 2bps richer across benchmarks.

• The NZ-US 10-year yield differential finished 3bps tighter at +15bps.
• Swap rates closed 2bps lower.
• RBNZ dated OIS pricing closed little changed across meetings. 21bps of easing is priced for August, with a cumulative 35bps by November 2025.
• The local calendar will feature the release of ANZ business confidence for July tomorrow. It continues to point to a gradual recovery in the economy. Cost and price components remain elevated, and inflation expectations are at 2.7% off their low.
• ANZ July consumer confidence is out on Friday. It rose sharply in June to 98.8, the highest this year, but still off December's 100.2. Rate cuts, which take time to be reflected in mortgage payments, have helped improve households' financial situations and reduced the time to buy component.
• June building permits will also be printed on Friday. They rose 10.4% m/m in May, and indicators suggest that the construction sector is recovering.
• On Thursday, the NZ Treasury plans to sell NZ$275mn of the 4.50% May-30 bond and NZ$175mn of the 4.25% May-34 bond.

Gold has been range trading during today’s APAC session, holding Monday’s loss, as markets wait for key events taking place this week. Wednesday’s FOMC decision is a particular focus but so too are trade talks, US Q2 GDP and July payrolls on Wednesday and Friday respectively. Bullion is 0.1%lower at $3312.2/oz after falling to a low of $3308.15 followed by a high of $3320.95. The moderately higher US dollar and yields have been pressuring gold.

• US-China talks will continue today. US commerce secretary Lutnick expects that there will be a 90-day extension of the tariff lull. Korea, Thailand and Brazil are working on agreements before the August 1 deadline.
• Bloomberg reported on research from Fidelity stating the possibility that gold could reach $4000/oz by end-2026 driven by Fed rate cuts, weaker greenback and continued central bank buying.
• Silver is down 0.2% to $38.10. It has been also been in a narrow range between $38.198 and $38.047.
• Equities are mixed with the S&P e-mini up 0.1% and KOSPI +0.5% but Hang Seng down 1.0% and Nikkei -0.9%. Oil prices are slightly lower with WTI -0.2% to $66.58/bbl. Copper is down 0.4%.
• Later preliminary June US trade, May house prices, July consumer confidence and June JOLTS job openings are released. There is also preliminary Q2 Spanish GDP. 

• Yesterday's rally proved to be short lived as bond futures sold off in the morning session to erase yesterday's gains.  
• The 10yr is down -0.19 to 108.21 to mark seven out of eight days of falls.  
• The 10yr remains below all major moving averages with the nearest the 20-day EMA at 108.65.

• The 2-year future is lower by -0.03 at 102.32 and remains below all major moving averages also, the nearest is the 20-day EMA at 102.40.
• The yield on the CGB 10yr has inched up to 1.73%