GOLD: Gold Up; Though Momentum Weak as $5,200 Test Holds
- Gold prices regained upward momentum in Asia today, rising 0.75% to trade near US$5,178.
- Spot was higher from the open reaching US$5,194 per ounce but gave back some of those gains in the afternoon session as it failed its latest attempt at $5,200.
- $5,200 remains a key technical resistance in the short term for gold, having broken above it briefly at the beginning of the month, but ultimately couldn't sustain above.
- Prices continue to trend near to the 20-day EMA - which whilst upward sloping still, shows signs of trend exhaustion. When a 20-day EMA flattens, price tends to "yo-yo" or whip back and forth across the line, making it less reliable indicator and risks a volatility squeeze.
- Intensifying geopolitical conflict between the United States and Iran drove a flight to safety, marking gold's further gains though the technical backdrop makes the outlook less certain with pull backs more prevalent than for most of 2025.
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AUD: AUD/USD - Back Above 0.7000 On A Hawkish Hike, Dips To Be Supported
The AUD/USD has had a range today of 0.6945 - 7033 in the Asia- Pac session, it is currently trading around 0.7020, +1.05%. The AUD has exploded higher thanks to a hawkish hike by the RBA. The AUD has been outperforming across the board as leveraged funds increase their longs anticipating today's hike and I suspect these trades will now begin to be added to. The AUD has moved quickly back to 0.7030 where I suspect we find some initial resistance, but this should now see the AUD supported on dips. On the day, the first buy-zone is back toward the 0.6965-0.6985 area, looking for a break above 0.7030 which could give it the momentum to retest the pivotal 0.7100-0.7200 area.
- MNI BRIEF: RBA Lifts Cash Rate To 3.85% On Higher Demand. The Reserve Bank of Australia Board unanimously decided to raise the cash rate by 25 basis points to 3.85% on Tuesday, citing stronger-than-expected private demand, greater capacity pressures than previously assessed, and a still tight labour market.
- The Bank’s updated forecasts showed headline inflation rising to 4.2% by June, up from November’s 3.7%, before returning below 3% by June 2027 at 2.9%, 20 basis points higher than previous estimates. The projections assume a higher cash rate, peaking at 4.3% by December 2027.
- MNI AU - RBA-dated OIS pricing is 3-7bps firmer across all meetings, with another 25bp hike more than fully priced by August (+30bps).
- "RBA GOV BULLOCK: CANNOT ALLOW INFLATION TO GET AWAY FROM US, PULSE OF INFLATION IS TOO STRONG" - [RTRS]
- "RBA GOV BULLOCK: WILL NOT GIVE FORWARD GUIDANCE, BOARD WILL REMAIN FOCUSED ON DATA " - [RTRS]
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6830(AUD315m), 0.6900(AUD338mm). Upcoming Close Strikes : 0.6875(AUD913m Feb 6), 0.6950(AUD1.96b Feb 4) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 81 Points
Fig 1: AUD/USD spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
MNI EXCLUSIVE: Advisors Want Beijing To Transfer SOE Shares Into Pension Funds
BONDS: NZGBS: Closed Richer Before RBA Decision, NZ-US 10Y Diff Tighter
NZGBs closed 1-2bps richer across benchmarks, solidly outperforming US tsys on the day. The NZ-US 10-year yield differential finished 7bps tighter at +32bps. Today’s move, therefore, allowed the differential to hold the range it has traded in over the past 12 months.
- Notably, the NZGB market was closed at the time of today’s RBA decision. Accordingly, there may be some negative spillover from ACGBs given the sharp sell-off post the RBA’s 25bps rate hike.
- Swap rates closed 2-3bps lower.
- RBNZ-dated OIS pricing closed little changed across meetings. No tightening is priced for February, while December 2026 assigns 51bps.
- Tomorrow, the local calendar will see Q4 Employment data.
- On Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.50% May-30 bond, NZ$175mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
Bloomberg Finance LP
