Gold rallied initially overnight on risk aversion ahead of the Trump/Xi meeting, only to fail once again at the 200-day moving average which sits at 1259 in Asia today.
Gold’s jitters were probably caused by the FOMC minutes discussing the start of the rundown of the Federal Reserve’s balance sheet this year. This should imply higher yields, and although the bond market hasn’t reacted (yet), both equities and gold did, by falling from their highs.
1259 and the 1261.50 levels make up initial resistance in gold today, with the 1240 level still the key support as gold trades at 1255 an ounce in early Asia. A break of the 1240 support would be of particular concern to gold bulls now given the multiple failures above.
We also note that silvers’ magic run higher may be losing some steam in the short term. We note bearish divergence between spot silver and its daily RSI and Stochastics.