Gold Breaks, Euro Sticks

Gold prices tumbled Tuesday as a wedge formation broke while the euro continues to hang around the 200-day moving average. The Australian dollar was the top performer while the Swiss franc lagged. Comments from Kuroda are the highlight of the upcoming session.

The US calendar was filled with economic data but it was price moves that stole the show. Gold fell $27 to $1266 as it cut through the April and May lows and hit a three-month high. The move was initially sustained by mild US dollar strength but even as the dollar retraced, gold remained near the lows.

No particular headline sparked the gold move but hope for stability in the Ukraine and a fresh record high in the S&P 500 contributed. The safe-haven demand for gold is crippled by large positions remain so a slide to $1200 or below in the near term can't be ruled out. This also explains the rlaly in USDCHF.

Better economic data would certainly help and there was some good news Tuesday in the durable goods orders report. Core orders fell 1.2% compared to 0.3% but the story was a two percentage point revision higher in the March report. Strong orders in at the end of Q1 will fuel economic optimism. The consumer confidence data was also solid while the Markit services PMI rose to 58.4 compared to 54.5 expected.

Most talk in markets continues to revolve around what the ECB will do next Thursday. Rate cuts are seen as a sure thing and now talk of a very long term refinancing operation is becoming more main stream. The euro tried the downside, hitting 1.3612 but later rebounded to a close at 1.3635; once again sticking close to the 200dma.

The next focus is BOJ leader Kuroda at 0000 GMT. He's been vocal lately and began jawboning last week. His initial comments failed to spook markets so he could choose to sound more aggressive today. A sprinkling of Australian and New Zealand indicators are also on the calendar but nothing likely to move markets.