Gold recovered fairly well from a one-week low that reached earlier this Friday.
Gold a one-and-a-half-week low was reached earlier this Friday, but the price of gold (XAUUSD) saw an intraday turnaround and currently holding steady at about $2,640 going into the European session. The recent drop in US Treasury bond yields has caused the USD to linger close to a multi-week low. This is in addition to wagers that the Fed will Lower borrowing costs later this month, combined with a slight deterioration in global risk sentiment, appear to be key factors supporting the safe-haven precious metal.
The safe-haven commodity benefits from a softer risk tone, geopolitical risks, and trade war fears.
Meanwhile, expectations that US President-elect Donald Trump’s policies will increase inflation are fueling hopes for a less dovish Fed. This, in turn, expected to act as a tailwind for the USD, limiting further gains for the non-yielding gold price. Traders also appear hesitant and eagerly await the release of the US Nonfarm Payrolls (NFP) report before making directional bets. The data will be scrutinize for additional clues about the Fed’s rate-cutting path, which will drive the USD and provide a new impetus to the XAUUSD.
Daily Market Update: Gold prices lack follow through Buying as traders appear cautious ahead of the key US NFP report.
Several influential FOMC members, including Federal Reserve Chair Jerome Powell, suggested on Wednesday that the US central bank may pause its rate-cutting cycle.
This, in turn, drives the non-yielding gold price to a one-week low on Friday, though a number of factors provide some support for the bullion and help limit any further depreciation.
Russia has shown no signs of fatigue in its nearly two-year conflict with Ukraine, pounding the country’s east over the last week with long-range weapons and sustained ground assaults.
Concerns over US President-elect Donald Trump’s trade tariffs and their impact on the global economic outlook temper investors’ appetite for riskier assets. Provide support for the safe-haven XAU/USD.
According to the CME Group’s FedWatch Tool, traders are pricing in a 70% chance that the Fed will cut borrowing costs by 25 basis points at the December meeting, with a 30% chance of a pause.
Rate cuts bets remained broadly stable after the US Department of Labor (DoL) reported.
Rate cuts bets remained broadly stable after the US Department of Labor (DoL) reported on Thursday that initial jobless claims increased to 224K for the week ending November 29, up from 215K the previous week.
The benchmark 10-year US Treasury yield is near its lowest level since October 22nd, and the US Dollar remains depressed near a multi-week low, providing additional support to the precious metal.
Investors eagerly await the release of the US Nonfarm Payrolls (NFP) report, which could provide cues about The Fed’s rate-cutting path will determine the USD and commodity’s near-term trajectory.
