Gold hangs in the balance as geo-risks rise

Between the US-Russia imbroglio, an unstable Syrian situation, North Korea, and a protectionist-leaning Trump administration, geopolitical risk is at a 15-year high with the related index at its highest level since the eve of the 2003 invasion of Iraq.

 "We see the gold trade experiencing jitters as these forces contend with the March 21 Federal Open Market Committee meeting [and its near-certain interest rate hike]," says Saxo Bank head of commodity strategy Ole Hansen.

"We remain bullish above $1,285/oz," concludes Saxo's commodities head, noting the metal's current $1,300-$1,340/oz range.

In other commodities, Hansen points to crude oil needing a break as well with the latest EIA report due this afternoon. Hansen cites rising shale production and continued robust demand as the forces working bidirectionally on oil.

In agriculture, Hansen points to soybean prices hitting a 4.5-month low versus corn on speculation that US farmers are set to plant more soybeans than corn for the first time since 1983.

"An elevated fund long, a record Brazilian crop, and the risk of Chinese tariffs are among the factors weighing on soybean prices," says Saxo's commodities head.

In FX, Saxo Bank head of forex strategy John Hardy reports that the NOK is in traders' crosshairs this morning ahead of the Norges Bank rate announcement at 09:00 GMT.

"This 9.52 level in EURNOK is pivotal and we see investors looking at NOKSEK and EURNOK ahead of what is expected to be another hawkish outing from the Norwegian central bank".

In dollar terms, the US surprise index remains positive with the market seeing a collapse in implied volatility even as the protectionism-inclined Trump administration continues to provide plenty of headline drama in an already unstable global atmosphere.