Gold falls for the third day in a row, hitting a new weekly low.
The gold price (XAUUSD) extends the previous day’s retracement slump from a five-and-a-half-month high. Reached last week and continues to fall throughout the Asian session on Wednesday. This is the commodity’s third consecutive day of decline. Dragging it to a new weekly low in the previous hour, around $1,978. Assuaging anxieties about the Israel-Hamas conflict. As well as anticipating a hawkish Federal Reserve (Fed), turn out to be significant factors impacting on the non-yielding yellow metal.
The XAUUSD is under pressure due to declining safe-haven demand and aggressive Fed predictions.
The downside for gold is likely to be limited. As the market remains focused on the outcome of the highly anticipated two-day FOMC monetary policy meeting. Which is scheduled to be revealed later in the US session. Concerns about China’s shaky economic rebound at the start of the fourth quarter may also offer support to the safe haven metal. And aid limit further losses. This, in turn, calls for caution in concluding that the XAUUSD has peaked in the near future.
Daily Market Movers: Gold price falls further from multi-month high
The gold price rose the most in a month since November 2022. But it starts the new month on a low note. A weaker note as safe-haven demand declines.
Traders are pricing in a smaller risk premium from the Israel-Hamas conflict because no other Arab countries have joined in so far. Hamas has stated that it will release international hostages in the coming days.
The US Dollar maintains its bullish tilt in the face of any hawkish surprises. From the highly anticipated FOMC monetary policy meeting.
The Federal Reserve will announce its decision later in the US session. And rates are expected to remain at a 22-year high for the second day in a row.
The US economy’s resiliency and persistently high inflation should allow the Fed to maintain its hawkish posture and leave the door open for additional rate hikes.
The return on benchmark 10-year US government bond remains close to 5%, a 16-year high reached in October, and serves as the foundation for the US Dollar.
China’s economic difficulties may boost the safe-haven metal ahead of the Fed’s decision.
According to a Caixin-sponsored survey, manufacturing activity in China declined in October for the first time in three months.
This suggests that China’s stimulus efforts only provided limited support to the fragile economic recovery, which could help the XAUUSD.
