Gold extended to the upside driven by risk aversion. Yesterday’s terror attack in Spain further sapped risk appetite that has been weighed recently by heightened geopolitical, political and economic risks.
The yellow metal eked out new highs for the year above 1296.06. A convincing push above $1300 would shift focus to last summer’s peak at 1375.15.
The dollar has eased as well, offering additional support for gold. The corrective uptick in the greenback over the past two-weeks never amounted to much. Critical support defined by the 91.92 low from May of 2016 is considered vulnerable.
Canada continues to struggle with low inflation as well. July CPI was unchanged. While annualized inflation ticked up to 1.2%, this is well below the BoC target.
The U.S. calendar is light with just preliminary Michigan consumer sentiment for August. We’ll also hear FedSpeak from Dallas Fed President Robert Kaplan.