Where we are: Gold (COMEX) is currently trading at 4476.0, down 1.46% on the day, and below the overnight range of 4454.6-4560.1. The current price is well below yesterday’s New York close, reflecting the ongoing pressure. The metal seems to be struggling to find a foothold amid a confluence of factors.
What’s driving it: The primary driver appears to be the stability in US real yields, currently at 2.16%, following recent declines that had supported gold. Breakeven inflation remaining steady at 2.4% is also providing limited upside catalyst for the metal, especially as risk appetite has returned. This has been further compounded by perceived easing of geopolitical tensions in the Middle East, as gold’s safe-haven appeal diminishes.
- Federal Reserve minutes from the discount rate meeting on April 20 and 29 revealed no immediate concerns over inflation or economic slowdown, reducing bets on near-term rate cuts and diminishing gold’s appeal as an inflation hedge.
- Net non-commercial positioning in gold remains modestly long, at +159,833 contracts, and is at only the 6th percentile, suggesting there is room for further long liquidation.
- Goldman Sachs raised its S&P 500 target to 8,000, signaling confidence in risk assets and further diminishing the relative attractiveness of gold.
NY session focus: Watch the 08:30 ET data releases carefully; any surprises in core inflation or jobless claims could reignite volatility in real yields and provide a short-term directional catalyst. Key levels to watch are 4450 as immediate support and 4500 as resistance. The trade that’s working right now is fading rallies as the market continues to price in diminished geopolitical risk and stable real yields. The major risk is a sharp deterioration in the Middle East situation, reigniting safe-haven demand. The pain trade for Gold is a sharp rally in US equities.