Spot gold has been rather rangebound of late, spending much of the week consolidating north of the $2,500/oz handle, finding solid buying interest upon several re-tests of that figure.
The relatively subdued conditions speaks to the quiet nature of this week’s data docket, which has been lacking in top-tier macro releases, and continues to do so until the August US employment report, due next Friday.
Hence, the yellow metal has found itself in something of a tug-of-war between still-supportive central bank buying, and relatively firm risk appetite.
Aforementioned flows do tilt the balance of risks to the upside over the medium-term, having been a powerful tailwind to gold for much of this year. Naturally, goldbugs will be seeking a soft jobs report next week, which would likely see the market more aggressively price a 50bp September Fed cut, to provide further support to any potential rally.
While a hawkish repricing of the market’s overly-ambitious current rate pricing may well pose headwinds to the precious metal complex, a closing break below $2,500/oz is likely needed before bears have conviction to re-enter the fray.
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