Gold continues to reflect a considerable negative correlation with USD and US treasury bond yields in a week that may pose little challenge to the greenback’s recent gains. A hotter services PMI print alluded to the continuing momentum of the US economy despite early signs in last months print (lower new orders and business activity/production in July).
With Citigroup’s economic surprise index remaining elevated compared to its peers, the US appears likely to see further surprises to the upside which bodes well for the US dollar. The US 10-year treasury yield has also pressured gold this week and despite a late dip, appears set to record a weekly advance – weighing on gold.
