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Gold steadies near $4,180 as the 10-year yield hits a 24-year high

What moved overnight

Gold bounced off Monday's $4,110 washout and is trading around $4,170-$4,190 this morning after a softer-than-expected August PCE report. Core PCE rose 0.2% month over month (3.0% annually vs 3.3% expected), which trimmed October Fed hike odds to around 38% from 45%. That gave the metal its first genuine relief in weeks.

But the relief trade is being crowded out by bonds. The US 10-year Treasury yield hit 5.34% this morning, its highest since 2002, after the worst quarterly bond selloff since 1994. The dollar index rose to 101.663, a three-month high. September was brutal for gold, down more than 6%, pressured by the Fed's September 16 hike to 3.75%-4.00%, its first in three years. Geopolitics stays live: Iran received a US response on the Gulf ceasefire proposal, and oil is swinging after China suspended oil products exports.

Levels I'm watching

$4,110Monday's low and the 78.6% Fib retracement area. Holding it keeps the correction structure intact.
$4,19250% Fib and the 100-hour moving average. Price keeps getting rejected here.
$4,235next resistance bulls need to clear to change the momentum
$4,335second resistance; above it the September downtrend starts looking broken

Today's calendar

7:30 AM ET: Challenger job cuts (September)

8:30 AM ET: Initial jobless claims (consensus ~200K, last 197K); continuing claims

9:05 AM ET: Fed's Barkin, Collins, and Schmid on a panel in Asheville, NC

9:45 AM ET: S&P Global manufacturing PMI (Sept final, consensus 57.0)

10:00 AM ET: ISM manufacturing PMI (Sept, consensus 55.0); construction spending (Aug); Fed Governor Waller speaks

10:30 AM ET: EIA natural gas storage

1:30 PM ET: Fed Vice Chair Jefferson speaks on the economy and monetary policy

3:00 PM ET: Fed Vice Chair Bowman speaks

3:30 PM ET: Fed's Cook and Williams speak

6:45 PM ET: Fed's Logan speaks

Tomorrow 8:30 AM ET: September nonfarm payrolls (consensus 98K)

The read

Price is trapped between better inflation news and a bond market that refuses to blink. I'm staying neutral below $4,192 and watching how price behaves into tomorrow's payrolls. Below $4,110, the correction has room to run toward $4,044.

Not financial advice. Educational commentary only. You make your own trading decisions.