JGBS: Futures Slightly Firmer Ahead Of BoJ Policy Decision

• Gold’s decline on Friday left investors scratching their heads as to why.
• Gold has, more than most asset classes, benefited from the uncertainty that abounds with tariffs being threatened by the US.
• Gold has enjoyed the ‘safe-haven’ status it is known for up almost 10% year to date on the uncertainty that the threat of tariffs create.
• Yet unexpectedly, gold declined -1.56% on Friday with market analysts scrambling to understand why.
• Weaker than expected US retail sales did little to spur gold, whilst wholesale prices were stronger, driven by higher food and energy costs.
• Gold has had positive returns every week in 2025 and was on track for a record week come Friday, before the decline.
• Opening at $2,928.21, meandered through the day, doing little before falling during the US session to end at $2,882.53 whilst still finishing ahead for the week.
• As the headlines swirl around the US President ordering an audit on the US holdings, and the consideration of selling gold, perhaps traders were happy to take profit on gold and await the next catalyst.
• With the US out today, its difficult to see a stimulus for the next move for gold but no doubt will continue to be impacted by the next tariff headline when it comes.  

Oil prices peaked during the European session on Friday and then trended lower as supply developments drove the market down. The USD index fell 0.3%. 

• WTI fell 1.0% on Friday to $70.57/bbl, close to the intraday low, and has started today lower at $70.33, just below initial support and bear trigger. It reached a high of $72.02 before trending lower through the rest of trading. It continues to move below the 50-day EMA of $72.14 but a clear break of the bear trigger at $70.43 would strengthen a bearish threat. Initial resistance is at $75.18, 3 February high.
• Brent rose to a peak of $75.85/bbl before declining to $74.53. It finished Friday down 0.5% to $74.64. The benchmark remained above support at $74.10, 6 February low. The bull trigger is at $81.20.
• There are concerns that the stock build seen in the US over the last few weeks will continue as not only could Canadian producers continue with elevated flows to the US afraid of tariffs, but also scheduled US refinery maintenance is likely to reduce its need for crude. There are signs of contemporaneous oversupply in the US.
• A port in Texas with capacity to ship 1mbd of crude first proposed in 2019 has been approved.
• Also on the supply side, the president of Iraq’s Kurdistan region said that the resumption of its oil exports could occur as soon as the end of March after a two year dispute stopped them. This would add around 300kbd to global oil exports. An agreement with Baghdad on how much will be reserved for domestic use is still required. 

• RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 1: 95.685/851 - High Feb 7 / High Dec 11 
• PRICE: 95.590 @ 16:14 GMT Feb 14
• SUP 1: 95.300 - Low Jan 14  
• SUP 2: 95.275 - Low Nov 14  (cont) and a key support
• SUP 3: 94.632 - 1.0% 10-dma envelope

Aussie 10-yr futures have drifted further off the Dec 11 high of 95.851. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition. For bulls, a confirmed reversal and a breach of 95.851, the Dec 11 high, would instead reinstate a bull cycle and refocus attention on resistance at 96.207, a Fibonacci retracement point.