Gold finds new buyers on Friday, halting the overnight drop from a two-week high.
On Thursday, the gold price (XAUUSD) saw an intraday turnaround from the $1,885 zone, or more than a two-week high. And ended towards the lower half of its daily range. In September, consumer prices in the United States (US) grew more than predicted. Raising hopes that the Federal Reserve (Fed) will maintain interest rates higher for longer. This resulted in the sudden overnight jump in US Treasury bond rates spurred a big short covering surge in the US Dollar (USD). Which was viewed as a crucial factor placing pressure on the precious metal.
Falling US government rates put USD bulls on the defensive, lending support to the metal.
The downside, however, lacks follow-through. With a minor decrease in US Treasury bond rates and a weaker USD aiding the Gold price. To attract some dip buying near the $1,868-1867 range during Friday’s Asian session. Several Fed members’ recent dovish statements hinted that the US central bank is approaching the end of its rate-hiking cycle. This dampens US bond rates, reducing part of the impetus for a strong Greenback. Aside from that, certain haven flows to the non-yielding yellow metal are driven by geopolitical events.
Daily Market Movers: The gold price is being supported by a number of reasons.
The gold price halts the previous day’s post-US CPI retracement decline from a two-week high, as US Treasury bond rates fall and the US Dollar weakens.
Recent remarks by numerous Federal Reserve members cast doubt on the US central bank’s near-term monetary policy stance.
The most recent US consumer inflation data, issued on Thursday, left the door open for at least one more 25 basis point (bps) increase by the end of the year.
The subject line The US CPI climbed 0.4% in September, while the annual rate remained stable at 3.7%, against market predictions for a little decrease to 3.6%.
The Core CPI excludes volatile food prices. and energy costs, which met expectations and fell to a 24-month low of 4.1% YoY in September.
Fyrthermore Inflation remains over the Fed’s 2% objective. Raising the potential of more policy tightening, prompting some caution among XAUUSD bulls.
As the statistics showed unequal progress toward restoring price stability. Boston Fed President Susan Collins said that the central bank may need to hike rates again to battle inflation.
Moreover Military hostilities between Israel. And the Palestinian Islamist party Hamas may continue to support safe-haven gold and restrict the downside.
Traders are now looking for a boost from Philadelphia Fed President Patrick Harker’s speech.
Traders are now looking for a boost from Philadelphia Fed President Patrick Harker’s speech. And the Preliminary Michigan Consumer Sentiment Index.
Furthermore The precious metal is expected to post impressive weekly gains of more than 2%. The most since mid-March, after a two-week losing run.
