GOLD & CRUDE OIL TALKING POINTS:
- Gold prices[1] locked in place as US Dollar[2], Treasury yields diverge
- PCE inflation data, flat risk trends unlikely to break the deadlock
- Crude oil prices[3] may fall on EIA inventory, supply trend reports
Gold prices continued to mark time in familiar territory as a recovery in risk appetite presented the same conflicting cues that anchored the yellow metal amid risk aversion, albeit in reverse. Easing concerns about political instability in Italy saw the US Dollar give back some of its recent gains. An accompanying reversal of haven-seeking capital flows sent Treasury bonds lower and buoyed yields however. Taken together, that saw gold’s anti-fiat appeal offset by its role as the benchmark for non-interest-bearing assets.
Meanwhile, sentiment-linked crude oil prices rose, tellingly tracking the recovery in the bellwether S&P 500[4] stock index. API inventory flow data showing stockpiles added 1 million barrels last week seemed to be ignored. The absence of fresh news-flow building on last week’s comments from Saudi and Russian officials signaling an on-coming easing of output curbs as well as the greenback’s downturn probably helped make the case for near-term recovery as well.
PCE INFLATION, EIA INVENTORY & SUPPLY TRENDS DATA DUE
From here, the Fed’s favored PCE inflation gauge headlines the economic calendar. The core on-year inflation rate is expected to tick down to 1.8 percent in April after hitting a 14-month high at 1.9 percent in the prior month. A print broadly in the vicinity of forecasts is unlikely to meaningfully alter standing Fed policy bets and so might pass without fireworks. That coupled with consolidating risk trends might leave
