Gold Traders’ Report - June 19, 2019

Jim Pogoda, Senior Gold Trader, Gold Bullion International 
JUN 19, 2019

Gold was a little choppy last night, but traded in a relatively narrow range of $1341.50 - $1347.50 with other financial markets, awaiting the FOMC rate decision later this afternoon.  It rallied to its high of $1347.50 during Asian time but was capped yet again by resistance at $1348 (down trendline from 8/25/13 $1433 high).  Gold gained against a modest pullback in S&P futures (2930 - 2924) and a dip in the US 10-year bond yield to 2.059% - but while the US dollar remained firm around 97.65.  During European time, gold slipped to its low of $1341.50, pressured by a further gain in the 10-year yield (2.091%), and a minor rebound in S&P futures (2928).  This was despite the dollar sliding to 97.53 – weighed by gains in the euro ($1.1186 - $1.1206, recovery / position squaring after yesterday’s plunge off of Draghi’s dovish slant), and the pound ($1.2541 - $1.2588, UK inflation meets expectations). 

After the NY open, S&P futures softened (2923), and the 10-year yield slipped back to 2.085%.  The DX moved down to 97.51, and gold traded up to $1344. 

US stocks were very steady through their open, with market participants awaiting the decision from the FOMC.  The 10-year yield climbed a bit further however (position squaring), reaching 2.099%.  The DX softened (DX to 97.45 – under some further pressure from the pound ($1.2625) and the euro ($1.1215).  Gold edged up further to $1345.75, but was unable to challenge the overnight high.

Markets remained quietly steady in to the afternoon, with the S&P hovering around unchanged (2917), and the 10-year yield trading between 2.085% - 2.095%.  The DX found a floor at 97.40, and gold edged up to trade between $1345 - $1346.50.

Open interest was up 2.3k contracts, showing a net of new longs from yesterday’s $7 advance.  Volume surged with 386k contracts trading. 

All markets will continue to focus on geopolitical events (especially Brexit news), developments with the Trump Administration (especially on US-China trade, potential legal issues), oil prices, and will turn to this afternoon’s FOMC statement and Powell’s Press Conference for near term direction. 

In the news:

Draghi punts, Trump grunts, gold bunts:   https://www.zerohedge.com/news/2019-06-19/draghi-punts-trump-grunts-gold-bunts