Gold Rallying On Falling US Yields

Metals Moving UpThe metals market is rallying back this week. After coming under heavy selling pressure over the last month, gold futures are on course to print their fourth consecutive positive session today. The safe haven has seen better demand in recent days as US yields have fallen back ahead of the Fed’s Jackson Hole Symposium.Jobs Revised Lower – PMIs Miss The MarkThere were two key developments yesterday which saw USD coming under pressure. Firstly, the annual benchmark revision for the US payrolls yesterday saw 306k jobs taken off the official number. The downside result saw yields dropping around 10bp. Secondly, the latest set of US PMIs released yesterday saw both readings falling short of forecasts with manufacturing in particular seen dropping deeper into negative territory.Hawkish Argument Fading?A main aspect of the hawkish case has been the resilience in US data and so with jobs growth being revised lower and these two leading indicators (services and manufacturing PMI) falling back last month, that argument has been diluted somewhat.  Traders now look ahead to Powell’s comments on Friday to see if the Fed chair reiterates the hawkish sentiment of the FOMC minutes or softens his tone.Technical ViewsGoldThe rally in gold prices has seen the market breaking back above the 1905.46 level this week. While still within the corrective bear channel from YTD highs, the next big test will be the channel top and the retest of the broken bull trend line, ahead of structural resistance at the 1973.51 level.