Gold futures on Comex were up 0.78% at $1,338.0 a troy ounce by 11:36 GMT, the highest since February 20 as sentiment on the U.S. dollar weakened due to a decline in bond yields and as sentiments developed more vigilant ahead of new Federal Reserve head Jerome Powell's testimony this week. We have a pretty low-level data week ahead, with US Payrolls being rolled out a week and end of month flow likely to be a main driver of FX through to Wednesday. As such, the focus this week is probably going to be on speakers. The main event in this regard is obviously the new Fed Chair, Jerome Powell’s testimony on Tuesday and Thursday.
Good ownership in front end Gold skews: With Gold front vols bound to remain firm for longer and as the late cycle Gold rally takes hold on the back of the late Fed, Gold skews should stay supported even as 3M skews are at the highest level since Aug 2017.
Returns from delta-hedged 25 delta riskies (refer above chart) have held well as skew pricing remained within range and despite an aggressive 2017 global vol sell-off.
While the Italian election may turn out to be materially more muted than last year’s French election 1st round which pushed 3M XAUUSD skews to the highs of 2.7 vols, at about 1.2 vol of positive static carry on 3M-1M segment 3M XAUUSD 25D riskies provide an attractive positive static carry risk-off hedge.
We recommend buying delta-hedged 3M XAUUSD 25-delta risk reversals @ 1.3/1.6 vol.
Currency Strength Index: FxWirePro’s hourly USD spot index has shown -37 (which is bearish), for more details on the index, please refer below weblink:
http://www.fxwirepro.com/currencyindex.
FxWirePro launches Absolute Return Managed Program. For more details, visit:


What does China’s host bid mean for the High Seas Treaty?
2025 Market Outlook: Key January Events to Watch
Bank of America Posts Strong Q4 2024 Results, Shares Rise
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty
Gold is meant to be a ‘safe haven’ in uncertain times. Why is it crashing amid a war?
Gold Loses Shine as Crude Oil Surges: Safe-Haven Metal Retreats Toward USD 4,500 Support
Stock Futures Dip as Investors Await Key Payrolls Data
Global Markets React to Strong U.S. Jobs Data and Rising Yields
China's Refining Industry Faces Major Shakeup Amid Challenges
Federal Reserve Balance Sheet Reduction: Brookings Research Outlines Possible Path Forward
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 



