PRECIOUS METALS: Gold - The Dip Is Shallow As Gold Accelerates To New Highs

• RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
• RES 2: 95.960 - High Apr 7 (cont.)
• RES 1: 95.900 - High Oct 17
• PRICE: 95.165 @ 15:24 GMT Dec 23
• SUP 1: 95.120 - Low Dec 10
• SUP 2: 95.087 - 2.0% Lower Bollinger Band
• SUP 3: 94.276 - 1.0% 10-dma envelope

Aussie 10-yr futures remain well toward the bottom of the recent range, having taken out all major support levels in the process. With 95.275 cleared, prices are pushing to new contract lows, opening vol-band support through 95.087 and into 94.276. Any recoveries need to break back above 95.900 to signal near-term bullish traction.

• RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
• RES 2: 96.780 - High Jun 26 (cont)
• RES 1: 96.700 - High Sep 12  
• PRICE: 95.775 @ 15:23 GMT Dec 23
• SUP 1: 95.740 - Low Dec 22
• SUP 2: 95.480 - Low 1st Nov ‘23
• SUP 3: 94.932 - 1.0% 10-dma envelope

Prices printed fresh pullback lows to begin the week, prompting the active contract to take out notable support into 95.760 and clear through to new multi-year lows. The slower pricing for additional RBA easing - and partial pricing for a return to rate hikes next year - should keep the front-end of the curve under pressure. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 95.480 as the next major support. 

Aussie bond futures have ticked down in the first part of Wednesday trade. 3yr (YM) was last off 2.5bps to 95.785, while the 10yr (XM) was off 1bps to 95.18.  This follows a firmer US Tsy yield backdrop from Tuesday's overnight session, as better than expected Q3 GDP data for the US aided front end yields (2yr up +3bps, 10yr year around flat). ACGB yields are 1-2bps firmer in early dealings, with the front end slightly outperforming. 

• Aussie 10yr futures remain towards the bottom end of recent ranges. Recent lows rest at 95.12, with downside focus likely to rest on a test under 95.00. Any recoveries need to break back above 95.900 (the Oct 17 high) to signal near-term bullish traction.
• On the cash yield side for the 10yr a push above the 4.80% region (last near 4.76%) is likely to remain topside focus. A break above this region would bring 5.00% into focus. The 20-day EMA sits back around 4.685%.
• For the 3yr cash yield, we are more the mid point of recent ranges (last 4.13%), with the 20-day EMA near 4.04%, while recent highs were marked just above 4.20%.
• The 3/10s curve is steady at +63bps, while the AU-US 10yr spread is around +60bps, little changed so far this week.
• Market pricing for the Feb meeting next year has remained fairly steady with hike odds around 34% per OIS pricing. By Dec next year the OIS implied rate sits just above 4%.
• The local data calendar swings back into gear in early Jan next year. Note that Nov CPI prints on Jan 7 (local markets are shut tomorrow and Friday).