Gold intermarket: committed bulls not done yet, awaiting a resurgence in Yen

Further to previous articles, Gold intermarket: bulls coming to the table in a change of market climate and Gold intermarket: where now for Gold, it's hit that key $1,260 target already?, Gold has been unable to attract further demand. 

This could be a telling sign that the Comey news was overdone and indeed the hype over the possible impeachment of Trump was also a hasty presumption. As analysts at Nomura explained, this issue is unlikely to be resolved anytime soon, but impeachment risk seems low.

• Trump scandal story to subside, markets could soon lose interest - Nomura

In fact, just today, the market showed how keen it is to get back to business as usual on just a video of Comey, under oath, suggesting there have been no obstructions to investigations. 

• US Dollar jumps suddenly following Comey's video suggesting that investigation obstructions "never happened"

Gold was unable to gather the same momentum as Wall Street (WS to the downside) and complete a full ten-dollar advance above the said 1260 resistance. As the Dow broke and closed under the said key support level in the previous article, Gold did manage 50% of the 1270 target but ran out of steam at previous support levels back on 23rd and 25th of April at 1265. The subsequent failures there triggered profit taking and the downside was accelerated on the Comey video that has been doing the rounds on the street today. The DXY rallied to 98.07 and Gold dropped 1245.80 the low on this news. However, the bulls may not be done for now and may remain committed until US yields pick up the pace above 2.3% on the 10 years - 'the Comey video' trade has already started to fade.

USD/JPY is also worth keeping a close eye on

Bulls may struggle through the key 111.50 level and risks are mounted to the downside still as risk sentiment remains fragile. USD/JPY can easily revert back to 110.20 on further risk aversion. A break there opens the 200-day MA at 109.73 in USD/JPY which could be correlated to a move to the said target in Gold at 1270 and higher towards 1295, bringing the Feb rally back into play.